Datacentres in the UK#
Whatâs this?
This is a free standing blogpost which is an overview of datacentres in the UK, written by Jessica Woodgate. Huw Day helped with the final edit.
Datacentres are the physical infrastructure that house the computing and networking equipment (primarily servers) used to store, process, and share data across private and public sectors[1]. Today, every email sent, online search made, or webpage scrolled is processed in a datacentre, making most jobs in the UK is reliant on them[2]. This blog post gives an overview of the datacentre industry in the UK, including the impact of datacentres on the economy, the environment, and communities.
Key points#
Workloads of datacentres have doubled since 2015, driven by a rapid expansion of the ICT sector and the rise of AI
The UK has the largest datacentre market in Europe, predicted to grow from 10-20% per year
Calls have been made to reform planning regulation for faster datacentre development
However, sustainability concerns exist regarding datacentre emissions and resource consumption
Experts have called for increased transparency regarding energy use, reliable access to renewables, and forums to build relationships between industry and local people
Background#
The information communication technology (ICT) sector is undergoing a period of huge growth and is predicted to increase from 18.4 billion devices online in 2018 to 29.3 billion devices by 2030 [3]. Online services, such as emails, websites, and so on, rely on computers called servers that must be provided with reliable power, cooling, and internet access. Datacentres provide the infrastructure which houses servers [4].
The UK has the largest datacentre market in Europe, with plans underway to build Europeâs largest datacentre in Hertfordshire by company DC01UK[5]. In 2024, datacentres contributed 43,500 jobs, ÂŁ640 million in tax, and ÂŁ4.7 billion in Gross Value Added (GVA) to the UK economy, with potential for an additional ÂŁ44 billion between 2025-2035 [2], [5], [6]. Due to the importance of datacentres in powering the economy and protecting vital data, datacentres have been designated as Critical National Infrastructure (CNI) alongside energy and water systems [7]. Since the UK government designated datacentres as CNI, the sector has responded with over ÂŁ25 billion of private investment [2].
Workloads of datacentres have doubled since 2015, driven by increasing requirements for artificial intelligence (AI), cloud computing, and government-backed infrastructure reforms. With significant advancements in AI and emerging technologies, the demand for datacentres is set to increase at a much faster rate than ever before with projections of future growth between 10-20% a year [2].
Datacentre services#
Datacentre services fall into two main categories:
AI requires physical infrastructure which is often housed in datacentres to support its operations.
AI is energy intensive, and power demand is predicted to increase at an average of 70% per year over the next three years. By 2027 AI may use as much energy as Spain used in 2022 [8]
Cloud computing is the provision of computational resources (e.g. data storage and processing) as a service over the internet.
Cloud computing is used by most UK organisations in some capacity, and can offer energy savings compared with on-premise facilities, although efficiency gains may lead to increased computation overall [9]
Jobs#
The primary economic value of datacentres is their role in enabling digital transformation across other sectors of the economy, as almost every job in the UK is linked to a datacentre at some point in the supply chain [2]. There is also a promise of job creation through the development of datacentres; the DC01UK datacentre will create over 700 local jobs and support 13,740 data and tech jobs across the country [5].
Datacentres and Energy#
The size of a datacentre is typically measured by its demand for power, where the greater the power demand, the more capacity for providing services [2]. The International Energy Agency reports that one datacentre today consumes as much electricity as 100,000 households, and the global electricity consumption from datacentres could double by 2026 [10], [11].
Energy use in AI#
AI, understood as adaptable and autonomous products or services5[5], requires physical infrastructure to support its operations. AI is energy intensive to train and maintain, as methods usually require large quantities of data which have to be acquired, transferred, stored, and processed - all of which require equipment and energy [12]. AI power demand is predicted to increase at an average of 70% per year over the next three years. By 2027, AI may use as much energy as Spain needed to power itself in 2022 [8]. Power consumption has been exacerbated by the rise of generative AI, which is AI that produces plausible text, images, sound, or video in response to user instructions [13]. Generative AI has been found to be orders of magnitude more expensive than other AI systems [14]. The Elsham datacentre in Lincolnshire is projected to release 857,254 annual CO2 emissions - five times the emissions of Birmingham airport from 2023-2024 [15], [16], [17].
Energy use in cloud computing#
Cloud computing is the provision of computational resources as a service over the internet, where data storage and processing are handled within centralised computing resources and provided to customers on-demand. Cloud computing is used by most UK organisations in some capacity and handle large quantities of data via datacentre facilities. Cloud computing can offer energy savings compared with on-premise facilities, but efficiency gains in computing may lead to increased computation overall [9].
Sustainable energy#
Innovative technologies support the sustainable growth of datacentres. Whilst the workload of datacentres has doubled since 2015, the electricity demand has remained flat demonstrating gains in energy efficiency [2]. As part of the European Green Deal [18], over 100 datacentre companies have committed to the climate neutral datacentre pact to make datacentres climate neutral by 2030 [19].
To enable sustainable energy consumption of datacentres, there is a need to secure timely grid connections, stable energy sources, and power from renewable energy suppliers [2]. The rapid increase in AI and datacentre workloads means that companies will seek the most readily available energy, which could be fossil fuels if renewables are not available [20]. Transitioning to renewable energy exposes the grid to increased unpredictability, as power generation depends on the weather [2]. Developers of the Elsham datacentre in Lincolnshire have ruled out on-site renewables as impractical; powering the system on wind energy would require 10,000 20-metre wind turbines [17].
Demand for renewables will need to be managed fairly between local communities and datacentres. The Moray West offshore windfarm is expected to generate enough electricity to power up to 640,000 homes [21]. More than half of the output has been purchased by Amazon [22]. By 2023, Microsoft, Meta, and Google had contracted an equal amount of renewable energy to the generation capacity of Sweden [2].
Datacentres and Water#
Water use#
Datacentres consume water indirectly, through electricity generation or supply-chain manufacturing, and directly, through cooling [4]. A medium-sized datacentre uses an equivalent amount of water to three averaged-sized hospitals [23]. AI is projected to reach 4.2-6.6 billion cubic meters of global water withdrawal in 2027; more than the total annual water of four to five Denmarkâs [24]. The indirect water consumption of datacentres in the UK may be lower than other jurisdictions, however, as its energy mix significantly differs from places such as the US, where power plants may rely on water.
Liquid cooling technologies present opportunities for reducing energy consumption and increasing efficiency. However, there may be an inverse relationship between energy efficiency and water efficiency: as one improves, the other could worsen [2]. Concerns have been raised about the efficiency of cooling with water and the possibility of burdening of local resources, especially as datacentres tend to be clustered around major population centres [25]. The first UK AI Growth Zone is to be placed in Culham [26], a few miles away from a new reservoir planned to service the water-stressed south-east England [27].
The Environment Agency note that the majority of datacentres use the public water supply rather than alternative sources [28]. The UK water sector requires increased resilience to climate change, with water supplies squeezed as hotter and drier summers become more probable [29]. Globally, the availability and quality of water is a growing concern, with projections suggesting that water demand will increase by 55% between 2000 and 2050 [30].
Sustainable water#
Water use of datacentres holds potential for sustainability gains. Datacentres could potentially reuse water not only within their own operations but also contribute excess water back into the system for others to use [2]. The European Datacentre Association incentivises exploration of avenues such as rainwater harvesting or boreholes to lower the reliance on potable water [31]. Many UK datacentre companies are looking to innovative closed-loop liquid cooling designs that minimise water consumption by recirculating it within the same system, and the industry is engaging with the Environment Agency to track and improve water management practices [2]. Companies such as Amazon have pledged to be âwater positiveâ by 2030, returning more water than what is used by datacentre operations [32].
Water offsetting, however, will need careful thought as it is conceptually different to carbon offsetting. Whilst for carbon, a tonne of pollutants removed from the atmosphere can cancel out a tonne emitted elsewhere, water is more localised. A community that has lost access to water will not be benefitted by another community far away gaining water [33].
Facilitating energy efficiency#
Whilst there are infrastructure challenges with the direct energy use of datacentres, technologies should be evaluated for their net energy impacts across sectors [1]. By providing infrastructure for AI technologies, datacentres hold promise to facilitate gains in energy efficiency, as sufficient computing power is an important component in expanding the integration of AI into the energy system [34].
The UK government has committed to decarbonising the national electricity grid by 2030, which largely requires increasing electricity generation from renewable sources [35]. The government plans to double onshore wind, triple solar, and quadruple offshore wind power generation capacity by 2030 [36]. However, the UK grid is facing regional renewable connection delays with green energy projects facing wait times of 10-15 years [37], [38]. Using digital innovation to reach net zero was one of the priorities identified by the government in 2022 [39], [40].
To advance energy efficiency, AI is likely to play a key role in modelling and optimisation, maintenance and security, customer-facing services, and markets and investment [41]. For example, scheduling algorithms can help to redistribute AI workloads among datacentres to minimise environmental impact by better distributing the demands to different locations [42]. AI could leverage big data from wind farms to improve the efficiency of energy generation, storage, and use [43], [44]. Data from devices like smart meters can be used by AI to help address current renewable connection delays and excessive network congestion [7].
Heat reuse#
By embracing a circular economy model, which recovers resources at their highest quality and minimises waste [45], datacentres could optimise resource utilisation by redirecting surplus heat for local heating networks [2]. Deep Green is a datacentre company that recycles heat, for example, to warm swimming pools [46], [47]. Deep Green claim that if just 1% of the datacentre demand in the UK operated on their servers, they could deploy every public pool in the country [48].
However, practical challenges exist. Heat reuse systems must be considered at the build stage of datacentres, as retrofitting can cause service disruptions, and excess heat from datacentres tends to have relatively low temperature [49], [50]. There are also issues that arise with seasonal changes, infrastructure proximity, and varying occupancy levels [2].
Datacentres and Communities#
Accommodating feedback#
It is crucial that communities are engaged in conversations about why datacentres need to be there and how they will work, so that the places that situate datacentres realise the benefits of hosting datacentre infrastructure [2]. Industry should work with local people and authorities to understand how benefits and social value can best be delivered by actively listening to local stakeholders, addressing their views, and allowing concerns and preferences to be voiced. Steps to engage communities could include holding local consultation meetings to understand peoplesâ priorities and concerns; improvements to local infrastructure to mitigate the impact of datacentre facilities; and the creation of buffer zones to minimise disruption to local habitats and preserve green spaces [51]. There is also a need for better public education surrounding what a datacentre is, what it does, and the economic implications of it [2].
Spreading the benefits fairly#
As a result of AI, there may be further decline in the share of wages as a proportion of national income, causing a widening of inequality [52]. It is important that communities hosting datacentres see the benefits of the value being generated and integrate people into the innovation economy.
Development considerations#
Consolidating smaller datacentres into larger ones leads to lower overall energy use, as servers can use the same purpose-built cooling systems [1]. Yet, finding appropriate land is challenging. Datacentres need a lot of space, with the average datacentre covering 100,000 square feet [6], can cause noise pollution [53], and need to be well-connected to relevant infrastructure, inciting planning battles between developers and local communities.
Space constraints in London have led developers to look to Green Belt land, which is land surrounding the city that is protected to prevent urban sprawl [54]. In Hertfordshire, Europeâs largest datacentre is scheduled to be built on 85 acres of Green Belt land by company DC01UK. The DC01UK datacentre has generated community backlash and concerns among locals that it could set a precedent for increased traffic and energy use, as well as harm the delicate local ecosystem [55], [56]. A local council rejected the plan for the datacentre, which was overruled by then Deputy Prime Minister Angela Rayner, stoking fears about the erosion of local democracy [57].
Transparency#
To hold companies to account, it is important that society has access to trustworthy data pertaining to the environmental impacts of datacentres and AI. Transparent data is essential for proper management of resources. Because of the recent AI boom, the Environment Agency is facing difficulties in predicting future water shortages. Datacentres currently do not have to report how much they are using for cooling, meaning that there is not sufficient data to understand their current use and needs [28]. The National Engineering Policy Centre has called for the UK government to require companies to submit mandatory reports on energy and water consumption as well as carbon emissions [58].
Policy Implications#
Planning reforms#
Tech UK calls for planning reforms regarding the development of datacentres, as currently there is no datacentres national policy statement, meaning that datacentres often suffer delays and inconsistent decision-making. Relevant planning reforms include the governmentâs inclusion of datacentres in the Nationally Significant Infrastructure Projects (NSIPs) to boost investment in growth-enabling infrastructure and give ministers the power to override local opposition [59]. Categorising datacentres as NSIPs shifts decision-making from local authorities to the national level [60]. Factors to consider when deciding where to build datacentres include land availability and cost, access to power, appropriate infrastructure (e.g. connectivity), and availability of a skilled workforce and customer base. Local planning authorities should ensure that datacentres are appropriately integrated into local plans [2].
Sustainability#
The ORCD recommends that regulation is needed to reduce the carbon footprint of datacentres to align with sustainability and Net Zero targets [61]. Currently, ICT energy efficiency and sustainability is primarily governed by industry standards and European and international standardisation committees. Many ICT companies have committed to significant reductions in emissions, although some have faced criticism for plans not being sufficiently detailed [1].
Factors that should be considered in regulation to align datacentres with Net Zero include ensuring the reliable supply of clean and affordable power. Energy should be thought of as a shared resource, promoting sustainability and transparency with users by engaging users as active participants and understanding user perspectives. Long-term energy system planning and incentives for data access is needed with clear collaborative regulatory frameworks and national energy plans [7]. The IMF has suggested that governments should consider imposing carbon taxes to capture the environmental cost of AI infrastructure, which includes datacentres [52].
Building relationships#
To foster collaboration between industry and local communities, techUK recommends that local government representative bodies should establish a new forum with industry, such as by developing a datacentre social value framework. Mayoral authorities should develop specific datacentre strategies that ensure they are central to delivering regional priorities [2].
Transparency#
There is a need for transparency in progress towards net zero targets, yet, because larger datacentre operators consider energy use figures to be sensitive proprietary information, it is difficult to track and disaggregate the energy consumption of datacentres from the rest of a companyâs energy use [1]. Suggested mitigations include setting up an independent organisation to collect and publish average figures regarding the energy use of datacentres across the sector [62].
Robustness#
Datacentres have been designated as CNI, allowing the government to support the sector in the event of critical incidents such as outages, cyber-attacks, and adverse weather events [5]. However, robustness considerations need to incorporate the effects of climate change as the increasing likelihood of extreme heatwaves threatens the operation of datacentres. In 2022, datacentres operated by Google and Oracle had to be taken offline because of a heatwave [63]. Real-world disaster scenarios such as flooding, the ability to report cyber security attacks, and factor in supply chain vulnerabilities should be considered in system resilience [7], [41].
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