UK risks losing billions in AI investment without a new ‘pro-growth’ approach to support data centres
Energy availability, public perception and planning complexity are hindering the growth of critical national infrastructure
- New report argues that the UK is at risk of missing out on the AI revolution if barriers holding back data centre growth aren’t addressed.
- Energy availability, energy prices and planning are among issues hindering growth, with data centre developers facing up to 15-year waits for grid connections.
- The government must go further by including data centres in the eligibility criteria for energy relief schemes and by creating a new tailored use class for data centres, for the UK to realise the potential of the critical infrastructure.
The report brings together reflections from some of the biggest data centre developers, as well as planners, construction, engineering and legal professions
At a recent industry roundtable organised by Copper Consultancy and Charles Russell Speechlys, the roundtable and subsequent report lay bare the stark challenges facing data centre development in the UK, and the impacts this could have on investment into UK plc. Key regulatory barriers – including energy availability and energy cost, as well as planning complexity – were identified alongside low public awareness as the main issues hindering the development of data centres in the UK.
The industry needs the Government to intervene
The report notes how high energy prices are currently hindering the UK’s global competitiveness in data centres and AI, actively dissuading investment in the UK. Given the resource-intensive nature of data centres, the industry needs the Government to intervene through targeted subsidies, reducing costs to match energy costs in rival regions like the US and the Nordics.
Concerns have also been raised with AI Growth Zones being seen as a silver bullet for the industry. While industry welcomes government support, the current planning framework is seen as overly rigid and risks misalignment with actual demand and repeating past planning mistakes like Slough’s unplanned growth. A new planning use class would allow for flexible, demand-led planning, especially important in the fast-moving AI industry.
Finally, public perception is seen as a critical non-regulatory issue for the sector to tackle, with half the UK’s population not knowing what a data centre is. Such low awareness leaves the public open to misinformation and a fundamental lack of understanding as to why data centres are critical to a future economy. The report calls on industry to engage more proactively on the need for data centres with the public, supported by the government, outlining why their development is critical to growth.
Download the report