Billions for UK data centres pose challenge for power grid

Warning of vast demands on water and energy if AI infrastructure expands in UK with new projects

- Patricia Clarke, Barney Macintyre & Peter McGill

Nvidia chief executive Jensen Huang said last week that the UK is having a “goldilocks” moment when it comes to AI. “It’s just missing the infrastructure,” he added.

In the week that Donald Trump came to visit, Microsoft said it would invest £22bn over four years to expand UK AI infrastructure and help build a national supercomputer - its largest investment outside the US.

Blackstone announced a £10bn data centre project in Blyth, while Google committed £5bn over two years and opened a data centre in Hertfordshire. Nvidia has invested £500m in Nscale, a London-based AI infrastructure company.

But energy executives have warned it will be a challenge to provide extra grid capacity to power these projects, especially in a country with some of Europe's highest energy costs.

Analysis of the announcements by The Observer shows that between 500 and 900MW of data centre capacity could become operational in the next three to five years. Powering a 100MW data centre currently costs £226m a year in the UK, compared with £156m in France and £67m in Sweden, according to a February report from the Social Market Foundation.

"Consumer bills are already under pressure in the wrong direction," said Stuart George, boss of Welsh energy company Green GEN Cymru. He said the projected data centre rollout had "the possibility of exacerbating that issue if it isn't counterbalanced by rapid deployment of low-cost generation and grid infrastructure".