The prime minister has unveiled his vision of Britain becoming an AI superpower, but the ferocious demand for energy and water to run the data centres remains a critical stumbling block. Tim Clark reports
The prime minister has a vision of Britain becoming an AI superpower, but the data centres needed to deliver such a dream present a ferocious demand for energy and water.
The prime minister has a vision of Britain becoming an AI superpower, but the energy – and water – demands from the data centres needed tothe government’s AI superpower ambition remain serious hurdles
“It can spot potholes!” is a phrase that is distinctly British. However, it isn’t one which many would use to describe the ushering in of a new form in intelligence.
That said, in a major announcement earlier this week prime minister Keir Starmer laid out a new roadmap on how to boost the economy and turn the UK into an artificial intelligence (AI) superpower, which can transform the economy, create jobs, and yes – spot potholes on its own.
Welcome to the next global technological revolution.
The government tasked AI adviser Matt Clifford with creating a UK action plan for supporting the growth of AI and its use in public services. He came back with 50 recommendations that are now being implemented, and form the basis of a major speech by the PM on Monday.
Building an AI nation is easier said than done, however, and for any ‘AI revolution’ to be successful you need one thing: Data centres.
The government plans to establish AI “growth zones” – known as AIGZ’s – with streamlined building approval processes to facilitate the construction of data centres and related facilities. Additionally, there is an emphasis on increasing public computing capacity through the development of a national supercomputer dedicated to AI research and applications.
Getting down with Didcot
The village of Culham, just north of Didcot, occupies an almost unique place in the history of UK science. Five decades ago a previous Labour government laid plans for a future world-changing industry – fusion power.
The then energy minister, Tony Benn, set the wheels in motion for what is now the UK’s foremost fusion research establishment. Although fusion power never lived up to its early promise, the Culham centre is among the few globally at the forefront of fusion research.
The facility will now also act as the fulcrum for the first new AIGZ. The government and the UK Atomic Energy Authority (UKAEA) will seek a private sector partner that would develop one of the UK’s largest AI data centres, beginning with 100MW of capacity, and with plans to scale up to 500MW.
The government states that the pilot “would pioneer innovative public-private models to deliver secure, dedicated public sector computing capacity, supporting key national priorities”.
In layman’s terms, this means courting big tech and major investment vehicles for cash to build centres and drive growth.
“Third time’s a charm – so fourth must be off the scale,” says Alistair Watson, UK head of planning and environment at law firm Taylor Wessing, referencing the number of times that an AI revolution has been mooted by successive prime ministers.
“For more AI you need more data centres. The government’s wholehearted endorsement of data centres in the AI Opportunity Action Plan is the fourth strategic planning announcement on the importance of data centres and digital infrastructure for the future of the country.
“The previous were the National Planning Policy Framework and the decision for the Iver data centre call in planning permission, both in December 2024, and the affirmation of data centres being Critical National Infrastructure in November 2024.
The Iver data centre serves as a case study in the rise of importance of such facilities, and the issue with planning and impacts on a local landscape.
Developers Greystoke Land and Altrad Limited submitted plans for a 163,000 square metre data centre on a former landfill and quarry site near the M25 in Iver in 2021. The application was at first refused by Buckinghamshire Council in September 2022. The developers appealed, and the decision was ultimately picked up by former communities secretary Michael Gove.
Publishing the decision on behalf of Gove, housing minister Lee Rowley refused the scheme over concerns it would impact the visual setting of the green belt. Those particular concerns are now arguably less important, mainly as the data centre was to be situated on the site of an old quarry – which could allocate it as ‘grey belt’ under Labour’s plans.
A new proposal, for a smaller data centre approximately 65,000 square metres in size on the same site was submitted in October 2023. Buckinghamshire Council refused the revised application, maintaining concerns about the Green Belt and potential environmental impacts.
Following the Labour Party’s victory in the general election in July, deputy prime minister Angela Rayner announced a review of planning decisions affecting critical infrastructure, including data centres.
In July 2024, the Ministry of Housing, Communities and Local Government (MHCLG) recovered appeals for the Iver scheme and another data centre in Abbots Langley, also near the M25 in Hertfordshire, indicating a shift towards prioritising economic benefits in planning decisions.
Last December, Rayner gave the scheme approval, citing the “urgent need” for data centre capacity to support the UK’s digital economy and the lack of alternative sites.
The planning hurdles at Iver highlight the headwinds that data centres have faced until recently.
While the government has not specified the exact number of AI Growth Zones to be created, it has indicated that additional zones will be announced later this year. The expansion of these zones is part of a broader strategy to position the UK as a global leader in AI by fostering innovation and economic growth through dedicated infrastructure and supportive policies.
Graham Herries, chair of the digital futures policy centre at the Institution of Engineering and Technology (IET) stated a number of issues the government will need to grapple with, including ensuring that the physical infrastructure is in place to handle the data centre boom.
“The data clouds are not in the sky – considerations must be made to mitigate the high energy requirements and usage of AI data centres and network infrastructure. Sustainable innovation is not a ‘nice to have’ scenario – this must happen, and the UK has the opportunity to be the trailblazer in this,” he says.
“Current data centres are unsustainable without greener infrastructure, so we need to see government support for green technologies by building sustainability into appropriate regulation of new and expanding technologies. This could include a bronze, silver, gold standard for the approval of new data centres – which support AI servers – in the UK, based on a sustainability rating.
“This is not an easy task, but we need sustainable innovation to be the future.”
Water, water everywhere
If the new AIGZs are to truly flourish, then they’ll need watering, literally.
According to a study published in October 2023, the use of AI and data centres can dramatically increase the need for water extraction and use. The study, published in ArXiv, stated that “more critically, the global AI demand may be accountable for 4.2 – 6.6bn cubic meters of water withdrawal in 2027, which is more than the total annual water withdrawal of two-thirds the total need of Denmark, or half of the United Kingdom”.
The Culham AIGZ will be located close to a new reservoir, to be built outside of Abingdon, however concerns have been raised over whether the arguably parched South East of England can handle the extra load on water supplies.
There are plenty of places in the UK that get high rainfall, and for water needs would be prime sites for new AIGZ’s and data centres, however they are in areas such as Wales, Scotland and Cumbria, which are not close to where the main powerhouses of the UK tech industry are based.
The issue with placing data centres at a distance is what is known as latency – the speed at which computers and data centres communicate with each other. The other is cost to lay fibre optic cables linking sites.
Energy demand is also a key issue for data centres. A report by CBRE in July found that data centre demand is outstripping supply in London, and a lack of capacity on the electricity grid has led to delays in connecting up new data centres (as well as having knock on impacts on housing and commercial development). These bottlenecks would need to be addressed.
The report stated: “Hyperscalers and enterprises may struggle to find available power in the largest submarkets. However, areas well outside of London’s main regions, with less data centre concentration, may offer more options. Consequently, London’s development radius will likely expand, even after key electricity substation upgrades.”
Taking London as the current tech capital of the UK, a fair guess would be that another AIGZ would be established in Cambridge, and also possibly east London to complement the cluster that is growing out of the west of the city along the M4 corridor.
Writing in Electrical Review late last year, Billy Durie, global sector head for data centres at Aggreko said that decentralised power may be the answer.
“But as demand continues to escalate, power availability and sustainability considerations will become more pressing. Decentralised energy solutions may hold the key to maintaining this upwards trajectory, allowing data centre stakeholders to bypass grid connection delays and supplement or replace grid power if required,” he says.
“Implementing these technologies and services at every stage of data centre development, from initial design to full operation, potential disruption can be mitigated or even averted. Yet to recognise the true potential of these solutions, they must be easily accessible to construction and facility management professionals.”
The government would do well to encourage new AIGZ’s in other parts of the country however, especially where energy capacity isn’t as constrained; a decentralised energy system may be an option worth investigating. That on top of a more permissive planning regime may help unlock the AI revolution the prime minister is hoping for.
“The real estate sector is ready to invest and develop, provided the planning regime matches our pace and the national need,” Watson adds.
“More data centres require more planning permissions, so at the same time, continued planning reform is needed that further clarifies presumptions in favour of granting planning permission for national need, and emphasises planning policy expectations to elected members.”
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