The draft London Plan was published yesterday, and for the first time, data centres have a dedicated planning policy of their own: Growing London’s Economy 3 (GLE3).
Sadiq Khan’s foreword describes the sector as one of the “industries of the future”, citing data centre ambitions in the same breath as the transformation of Oxford Street and the creation of new economic clusters. That’s a significant shift in tone from a sector that, until now, has been planned for under the same general industrial land rules as warehousing and logistics and is facing calls for a moratorium north of the border.
Conditional Grey Belt Access
The most striking feature of the new framework is that data centres “may be preferred” for grey belt land outside London’s reviewed growth areas via a standing route available to no other major land use. Under the Plan, housing, industrial, and warehousing all must compete for the best-connected Green Belt sites within growth areas identified by London Boroughs and other plan-making authorities. In these areas, large-scale release can be justified by “strategic exceptional circumstances” (Policy PV7, B), reviewed against sustainability tests like proximity to rail and bus corridors, with land outside those areas only released in very limited ones. Data centres are cited as “the only exception” to this rule (para 6.48). Because they generate significantly less traffic than logistics or warehousing, the connectivity tests that govern Green Belt release for industrial uses don’t apply in the same way. Rather than the PV7 Part E route that defines the terms of other out-of-area release, data centres get a bespoke track of their own under GLE3, which comes with a range of new, tough conditions.
A sui generis framework
That Green Belt flexibility comes with an important trade-off: data centres are formally excluded from the definition of “industrial land” (para 4.36), and GLE3 explicitly disapplies the Strategic Industrial Locations (SIL) framework to them (para 4.19).
That means a developer can no longer simply apply to build a data centre on existing SIL land as an industrial use extension. Instead, they’ll need the site written into a Local Plan. Because most plan-making authorities have yet to allocate space to data centres, they can rely on GLE3’s own suitability test as an interim route.
This may have a knock-on effect for some sites, but in the long run should give confidence to the sector. London is proposing to consent data centres on their own terms according to their own unique needs, impacts, and opportunities – rather than being folded into general planning.
Where data centres can go
Much of the recent discourse around data centres nationally has centred on the absence of a joined-up, coordinated approach that weighs impacts cumulatively. That gap has meant missed opportunities, not least the failure to systematically capture and reuse the enormous waste heat these power-hungry sites generate.
GLE3 sets a five-point test for identifying suitable locations (Part A): grid and water capacity, clustering opportunities, local heat recovery potential, land availability that doesn’t compromise housing supply, and compliance with Habitats Regulations — specifically, air quality impacts from backup generators on Epping Forest Special Area of Conservation, one of only three SACs in the London area and the only one named in the policy. Inside a suitable location, proposals should be “supported in principle” (Part D). Outside of one, developers must justify the location and demonstrate mitigation of infrastructure impacts (Part E). At Copper, we work closely with local communities to help them shape local projects. Getting that engagement right early, before a scheme reaches these tests, will likely determine how smoothly individual proposals move through the system.
The Plan backs this up with a mandate for early engagement. Policy MBUL4 requires data centre developers to engage directly with the National Energy System Operator (NESO) and National Grid for any connection above 100MW, and with statutory water undertakers regardless of scale. The Plan itself flags that the long-overdue National Policy Statement on data centres is still only “expected” (para 4.30). Khan has raced ahead of the Government, setting out the terms on which large developments must engage with energy and water providers.
If GLE3’s suitable-locations test helps close that gap locally, it may serve as a model of the kind of joined-up thinking the sector has been asking for.
Land need and housing shortfall
The Plan’s own reasoning for capping housing delivery over the next decade explicitly lists data centres among the “growing uses” competing for land and infrastructure (para 1.19). That’s a direct acknowledgement that data centre growth and housing delivery are drawing on the same limited grid, water and land capacity and that City Hall is trying to plan for both rather than treating one as a lesser priority.
A tighter emissions regime for backup power
Data centre backup generators are also moved onto a separate, more actively managed regime than other developments. Developers will need to minimise testing frequency, use the lowest-emission engines and fuels available, and choose siting and testing hours to limit human exposure. Sites within 10km of Epping Forest face additional scrutiny given the habitat’s known sensitivity to nitrate and ammonia deposition.
A model policy?
The London Plan is out for consultation until 15 October 2026, ahead of an independent Examination in Public and eventual adoption in 2028. How the suitability test, SIL exclusion and utilities engagement thresholds are ultimately calibrated will depend heavily on who responds to this consultation. For developers, this is your window to help shape a framework that will govern the sector for years to come.
Incoming Prime Minister Andy Burnham is reportedly considering a review of England’s AI Growth Zones policy and will be under pressure to move his DSIT Secretary forward on a long-overdue National Policy Statement.
Like Khan, Burnham wants the economic upside of data centre growth, but knows that growth draws on the same grid, water and land that housing and other priorities need. If GLE3’s joined-up approach to grid capacity, water stress, land classification and Green Belt access proves amenable to the industry, this consultation offers a live, tested model of what a more coordinated national planning policy could look like.
We will have to wait and see if “Number 10 in the North” is watching City Hall’s experiment closely enough to borrow from it.
Copper Consultancy works with clients across the UK data centre sector. Get in touch to discuss how the draft London Plan might affect your projects.