Data centres are no longer invisible, and that changes everything

As with every week this year, last week was a busy one for the data centre sector. Many across the industry will have spent it reviewing the Government’s proposed reforms to the demand connections queue, intended to accelerate data centre deployment. We also saw a successful section 35 direction into the NSIP regime for the SDC M40 Campus in Buckinghamshire, alongside approval in Lincolnshire for a 1GW data centre campus, the largest data centre campus in the UK to date.   

Beyond individual projects, there are wider (if indirect) signs of momentum. Over the past two weeks, I’ve seen driverless cars navigating Soho and Smithfield Market as well as strong words from Whitehall vowing that the UK will “beat the G7 at AI adoption.” Lofty ambitions, ultimately facilitated by shovels in the ground delivering unprecedented data centre capacity. Even driverless roads eventually lead back to planning.  

So far, the Government has tried to keep up. Along with connections reform, positive interventions have included the designation of data centres as Critical National Infrastructure, allowing direction of data centre applications into the NSIP regime, positive wording in the NPPF and the creation of AI Growth Zones. Put together, these measures are a clear sign of intent from the government to speed up deployment. In reality, it may be that they are just enough to help the sector stay afloat as projects becoming increasingly complex to address some of the sector’s most fundamental constraints.  

The section 35 direction for the SDC M40 campus illustrates this well. While recognising the project’s nationally significant economic benefits, a real driver of the decision was the fact that the scale of onsite power generation required would necessitate a Development Consent Order in its own right. As grid capacity continues to lag demand, and data centre campuses get larger, we should expect more hybrid applications of this kind to come forward to compensate.  

But, as with any emerging technology, it is not just policy that is needed. The need to articulate on a national level the positive needs case for data centres cannot be overstated.  Concerns around emissions, resource use, speculative demand and local impacts are beginning to surface. Left unaddressed, these issues risk chipping away at the broad political consensus data centre development currently enjoys, which in time will translate into risk at the individual project level.   

This matters all the more as the sector’s reach expands across the UK. Until relatively recently, data centres primarily supported everyday digital activity, operating in the background and indistinguishable from warehouse and office spaces near big cities. That is changing. More complex and energy intensive uses, particularly AI training, are now coming forward at far greater scale. This reshapes both the physical form, composition and geography of proposals beyond traditional cluster locations and into new communities.   

The next phase of the sector’s growth will be shaped not just by policy and power, but by how convincingly the national story is made locally.