Since the new government took the reins in July 2024, nearly £40 billion has been announced for datacentre investments in the UK. This shows a real commitment to nurturing the growth of data centers—something the industry welcomes. But there’s a pressing concern: before Prime Minister Keir Starmer’s administration, experts were already worrying about the UK power grid’s ability to handle the rising demand from these facilities.
Computer Weekly has highlighted this issue over the last decade, and it’s becoming even more urgent as demand from hyperscale data centers skyrockets. With the government eager to accelerate datacentre developments, they hope to capitalize on the booming demand for cloud services and AI. However, the possible strain on the UK’s energy security and supply raises questions, especially as the government pushes to decarbonize the grid by shifting away from fossil fuels to renewables.
At the Datacentre World conference in March 2025, Michael Drury from Lucid Catalyst pointed out that this is a global issue. He emphasized that ignoring datacentres doesn’t exempt us from the impending energy gap, particularly in countries whose fossil fuel generation is declining while energy needs continue to rise.
Globally, datacentres consumed 460 terawatt hours (TWh) of power in 2022, and the International Energy Agency (IEA) expects that to double to over 1,000 TWh by next year. Drury illustrated how long it took to reach 460 TWh—about 30 years—and warned that the energy demand outside of datacentres is also increasing, creating competition for resources. A recent survey by Cadence found that 70% of IT leaders believe national power grids are nearing their limits due to datacentre growth, and 83% worry that datacentres are competing for the same energy needed by homes.
When power grids get strained, the risk of outages rises for both residential areas and datacentres. Cadence pointed out that this situation could lead to significant financial challenges for datacentres and more public resistance to their development.
Another layer of complexity is how long it takes for new infrastructure to connect to the grid. According to the National Infrastructure Commission (NIC), businesses want assurances of reliable power before investing, and delays can push them to seek opportunities elsewhere. Currently, there’s a massive backlog of grid connection requests, estimated by Ofgem to take 10-15 years to address. This creates hurdles for datacentre developers aiming to support the government’s AI aspirations.
Despite these challenges, there’s some reason to be hopeful. Ofgem has plans to clear out “zombie” projects from the grid connection queue, allowing for more active energy generation and storage projects to take priority. They aim to expedite connections for green energy initiatives that can be operational within five years, aligning with the government’s net-zero goals.
John Booth from the Data Centre Alliance highlighted the UK’s energy imports, noting that we currently bring in about 9.8GW through interconnectors from neighboring countries. The government aims to double that capacity by 2030. However, Booth cautioned that relying heavily on interconnectors is not a sustainable long-term strategy since it ties funds up that could be used to bolster domestic capacity.
Louisa Cilenti from Clear Decisions expressed optimism that the UK can meet future energy demands with careful planning and investment. With abundant renewable resources like wind and solar on the rise, the key question is how quickly we can integrate them into the grid and ensure energy reaches the right places.
Michael Clark from Relode echoed the sentiment that while the UK has the energy resources, the critical issue lies in the infrastructure. He acknowledged Ofgem’s efforts but stressed that the decision-making process needs to adapt quickly to the changing landscape of demand for renewable energy.
This ongoing dialogue illustrates the tension between rapid datacentre expansion and the pressing need for sustainable energy solutions.