Data centres: turning UK policy into reality means securing power and permitting
By Alexander Lopez
The rapid development and utilisation of artificial intelligence (AI) and large learning models (LLM) is reshaping our everyday lives. As demand for these technologies increase, so is the demand for data centres and connected infrastructure, with increased pressure to build new capacity as quickly as possible.
In September 2024 the UK government designated data centres as Critical National Infrastructure (CNI), recognising their strategic importance “as engines of modern life, power[ing] the digital economy and keep[ing] our most personal information safe” according to the UK’s Technology Secretary, Peter Kyle MP. This move reflects the growing importance placed on data centre provision, including securing the power needs and planning consents so projects move ahead at pace.
AI demand: ‘Bankability’ and long-term drivers of growth
Projects led by hyper-scalers with multi-year commitments are increasing in line with demand. Amazon Web Services alone has committed £8bn to UK data centres over the next five years. This growth focuses on London, which already has 1.3 GW of capacity and a further 170 MW under build. Alongside these projects, the government’s UK Compute Roadmap and new AI Growth Zones are together linking priority sites to power and planning support, helping to crowd in long-term institutional capital.
The Compute Roadmap forecasts a 5.7-times rise in national compute demand by 2035. It sets near-term milestones, with the first Growth Zone sites due this summer and build starts targeted by the end of 2025. This policy foundation signals a long-term programme rather than a passing trend, giving investors what matters most: clearer timelines, reliable routes to power, and a wider pipeline of build-ready projects.
Power and connections: the binding constraint
Translating policy into capacity depends above all on securing power. Grid reinforcement typically takes five to 15 years, far slower than AI demand and new capacity, leaving a UK connection backlog of around 600 projects. The National Energy System Operator (NESO) is moving to a first-ready, first-connected regime, clearing queues and fast-tracking battery storage, and has temporarily paused new transmission applications to manage more than 1,700 requests. The immediate priority is to accelerate connections at strategic clusters and invest ahead in the grid, so that projects reach energisation on time.
The next step is consistent implementation. NESO’s plan elevates “industries of the future” such as data centres and AI, enforces first-ready / first-needed sequencing, and clears dormant projects so prepared schemes are connected sooner. With Ofgem’s backing, the plan could unlock around £40bn a year of private investment; combined with targeted grid upgrades at planned clusters, scope for user co-funding and long-term clean-power contracts, all to bring connection dates forward by years.
Planning and permitting: from signals to certainty
With power pathways in focus, the next dependency is planning that moves at the same pace. Government is overhauling the Nationally Significant Infrastructure Project (NSIP) regime to deliver faster, more predictable decisions, with targeted streamlining set out in the Planning and Infrastructure Bill. A ministerial statement in April confirmed the intention to remove the statutory pre-application consultation requirement for NSIPs to cut time and duplication, while retaining engagement through other channels. By pairing planning support with power access, AI Growth Zones help projects move faster from consent to connection.
Looking ahead
The UK has the right building blocks in place: rising hyperscale demand, a national Compute Roadmap, and AI Growth Zones that link priority sites to power and planning. The job now is delivery — to apply the first-ready, first-connected regime, sequence consents with grid milestones, and concentrate effort at strategic clusters. Do that and the market offers what long-term investors need: clear schedules, reliable power access, and more build-ready projects across the UK.
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