Data Centres - Will we learn from the past?

Two decades ago, it was mobile phone masts and the now vintage image of 3G mast technology being installed. As the roll-out gathered pace, the country rose up and opposition groups and marches took hold in some of the more usually sedate corners of the country. The lasting memory of seeing protestors relying on their mobile phones to communicate around a protest to stop mobile connectivity really summed up the reactionary and short-sighted manner of the protests.  

Today, there is an increasing focus on data centres as society grapples with the growth and adoption of AI. This morning, I spoke at the Data Transformation Conference, organised by industry representatives, the Data Centre Alliance, and talked about the four pitfalls facing the future of data centre development and, in turn, the expansion of AI in the UK – politics, power, permission, and perceptions.  

A recent string of negative data centre headlines peaked at the weekend with the announcement by Microsoft that they would not be proceeding with their project in Loughton, Essex. Speculation for the reason focused on the lengthy delay to a power connection. This came as a blow to Chancellor John Healey ten days before his first Budget, however Nscale confirmed they remain committed to the Loughton project and the UK. As well as this, the Financial Times reported investors are racing to buy credit default swaps to protect portfolios in the event the AI boom unravels. 

Grid capacity, transformation and modernisation have all been at the heart of the UK energy debate in recent years. However, the initial focus on enabling more renewable energy while better connecting areas of generation with areas of consumption has now rather been eclipsed by the big power off-taker in the room - data centres. This has revealed an emerging tension: if we want to make our energy cleaner, do we start by attempting to reduce energy consumption and limiting some of these new technologies, or do we start from the perspective of working out how much energy we need and working back from there? This has prompted some politicians, notably in the Conservative and Reform UK parties, to start talking not just about one type of energy but how we can generate an abundance of energy from all sources. 

The major political parties present an informal coalition of opinion that is pro-growth and supportive of AI and data centres, both from a sense of economic growth and to ensure that our own sovereign capabilities provide the resilience and security we need, rather than leave the UK as a tech slave to offshore servers.   

Investors not only face the daunting prospect of a power connection that could slip almost a decade into the future, but planning determination for a data centre takes ever longer. The disconnect between positive words and challenging delivery landscape could not be much greater, and it is why we see new projects announced before some of those investors quietly change their minds and move to another country. 

The AI question is not about providing a base for overseas tech companies to use our land (as some might view it) but it is the next stage of our technological development as society – healthcare, education, business, security, defence and so many other areas of our daily lives - stand to be positively impacted from the adoption of AI tools. Like railways, the internet, and telephone networks before, AI is not the end in itself, but the latest connectivity network that brings people, knowledge, data, and ideas together. 

The adoption of new technology and constructing a domestic infrastructure that feeds creative growth, underpins national resilience, and protects the UK in the global AI race is not a policy to dwell on for the next few years. Developers, investors and hyperscalers are mobile and agile – they will move to the opportunity locations. Data knows no national boundaries and neither does data infrastructure.   

SEC Newgate’s own research earlier this year found that UK public awareness of data centres is very low, with 89% of the UK public saying they know little or nothing about data centres. However, more than half of those surveyed recognised the importance to the UK to build more data centres. Six in ten people said they would accept more data centres locally if they supported national growth. The argument that better understanding of the critical role data centres play is plain to see.  

As a country, we are at a key decision point, where we can engage, facilitate and capture our slice of the AI pie or we can wave with scepticism and fear as those investment dollars, intelligence racks, and technological opportunities set sail for other countries. The clock is ticking!   

The SEC Newgate team works with data centre developers and investors across the UK, advising on national political advocacy, community relations, support through the planning process and wider corporate communications. Get in touch if you would like to discuss our experience and insights.