Powering the future: The industry view on data centre infrastructure

As AI, cloud computing and high density workloads accelerate, the UK faces a critical question: can its energy system keep pace with data centre-driven digital growth? At Shoosmiths’ Clean Currents event, leaders across energy, infrastructure and tech agreed that the next decade will require faster grid connections, greater flexibility, cleaner generation and stronger collaboration.

Market Pulse: Pressure and Opportunity

The biggest immediate barrier is grid constraint. Connection queues continue to expand due to electrification, decentralisation and rising demand from emerging AI zones. While these zones prioritise strategic projects, they risk creating a two-tier system with long delays elsewhere. With global competition for AI infrastructure intensifying, the UK must strengthen incentives without distorting markets. Scotland stands out with strong wind resources and growing storage capacity, offering major potential for future data centres.

High energy costs remain a challenge, driven by policy levies and network charges. Calls for levy reform are growing, arguing that costs should shift from electricity bills to general taxation. Corporate PPAs offer price certainty but not always lower costs, and smaller operators often struggle to access them.

Unlocking Grid Flexibility

To support digital growth, flexibility must expand. Battery integrated connections already help balance demand and ease bottlenecks. Interest in private wire networks and grid park models is rising, enabled by legislative updates that allow clusters of high demand users to share local generation and storage. Long duration energy storage, offering six to eight hours of support, is expected to be transformative by stabilising the system and reducing long term costs.

Building Greener, Smarter Infrastructure

The second panel explored policy and infrastructure. Including data centres in the Nationally Significant Infrastructure Projects regime could speed delivery if the sector helps shape the framework. Sustainability expectations are increasing as CSRD and IFRS reporting expand. Water management, emissions accuracy and credible transition plans are now essential. Decarbonisation technologies such as liquid and immersion cooling, AI driven optimisation and emerging nuclear solutions including small modular reactors are progressing, while biomethane offers a near term emissions reduction option.

Collaboration Will Define the Future

Earlier collaboration between operators, planners and grid stakeholders can reduce constraints and speed delivery. Financing is also shifting, with hyperscalers taking direct stakes in assets such as long duration storage and nuclear. Market gaps remain, including tidal power and bulk storage, and government support may be needed. Reform of electricity pricing and levy structures is becoming increasingly urgent.

Conclusion

As digital demand surges and energy networks come under strain, the link between data and power is becoming one of the UK’s most strategic challenges. Clean Currents highlighted a system under pressure but rich with opportunity. Decisions in the coming years will shape both the future of data centres and the UK’s global digital competitiveness.

Data Centres Programme activities

techUK provides a collective voice for UK Data Centre operators working with government to improve the business environment for our members. We keep members up to date with the key technical and regulatory developments that may impact growth and on funding opportunities that may increase commercial competitiveness. Visit the programme page here.