London’s betting big on data centres—£10bn big, to be exact. Three massive projects dropped last week alone, all racing to cash in on AI’s insatiable appetite for computing power. But here’s the catch: the UK’s electricity grid can’t keep up. Developers are sitting on planning approvals whilst waiting years for power connections, and some are already packing their bags for North Africa. Can Britain’s infrastructure catch up before the AI gold rush moves elsewhere?
The £10bn Building Spree
Colt’s £2.5bn West London Expansion
Colt Data Centre Services just got the green light from Hillingdon council to transform their Hayes site into a proper hyperscale campus. We’re talking three new data centres plus an innovation hub, adding 97 megawatts of IT power—enough to run a small city’s worth of AI calculations.
The project’s replacing an old retail park, creating 500 permanent jobs in the process. Construction kicks off mid-2026, with the first facility going live in early 2029. Not exactly lightning speed, but that’s the new normal for UK infrastructure.
Ark’s £2bn Watford Campus
Not to be outdone, Ark Data Centres announced a £2bn development near Watford on what used to be a Mercure hotel site. They’re planning six multi-storey data centres with a combined 200-megawatt capacity—double Colt’s expansion.
Public consultation’s already underway, which tells you how seriously developers are taking community buy-in these days. When you’re asking for enough power to light up a town, you’d better make friends with the neighbours.
Why the Sudden Rush?
Two words: artificial intelligence.
Tech giants are scrambling for computing capacity like it’s toilet paper in March 2020. Microsoft recently complained about “having chips but no electricity”—a very 2025 problem to have. You’ve got the hardware, you’ve got the algorithms, but you can’t plug the bloody thing in.
National Grid’s John Pettigrew dropped a telling stat: data centres now represent over half of all new electricity connection applications. The pipeline? 19 gigawatts of new facilities planned for the next five years. That’s roughly a third of the UK’s current peak demand.
Let that sink in for a moment.
The Grid’s Breaking Point
Here’s where it gets messy.
Ofgem reported that grid connection requests have exploded from 41 GW to 125 GW since November 2024. Transmission demands jumped by 80 GW. The system’s groaning under the weight of applications, many of them speculative punts from developers hoping to strike gold.
Regulators are now introducing screening measures to filter out the tyre-kickers. But the damage is done—viable projects are stuck in queues behind zombie applications that’ll never get built.
Developers Are Voting With Their Feet
A recent poll of 50 UK data centre developers paints a grim picture. More than three-quarters are exploring sites abroad. Half have already relocated projects. Connection delays of up to eight years will do that.
Where are they going? North Africa’s emerging as a favourite, along with parts of Asia. Turns out other countries are quite keen to host the infrastructure powering the AI revolution, and they’re not making developers wait nearly a decade for a grid connection.
National Grid’s £30m Upgrade
National Grid’s not sitting idle. They’re pumping £30m into what they’re calling the “great grid upgrade”—expanding and modernising electricity networks across England and Wales over the next four years.
Seventeen major projects are in the works, including new substations and beefed-up connections for renewable energy and data centres. The plan is to prioritise projects that can actually come online before 2030 whilst clearing out the deadwood clogging up the queue.
The UK government’s working alongside the Grid and energy regulators to prevent critical AI infrastructure from being strangled by energy bottlenecks. Whether they can move fast enough is the critical question.
What This Means for Britain’s Tech Ambitions
London’s still got serious advantages—proximity to financial services, deep talent pools, favourable regulatory environment. But infrastructure trumps everything else when you need hundreds of megawatts of reliable power.
If the UK can’t sort its grid connection process, we’ll build the facilities but lose the actual computing workloads to countries that figured out how to deliver electricity this decade. That’s not just a missed economic opportunity—it’s handing over a strategic asset in the AI race.
The clock’s ticking. London’s data centre boom is real, but it’s racing against a grid that’s moving in slow motion. Something’s got to give.
FAQ
Q1: How much power do these new London data centres need?
A: The three projects announced total nearly 300 megawatts of capacity. For context, that’s roughly equivalent to powering 300,000 homes, though data centres run 24/7 whilst residential demand fluctuates throughout the day.
Q2: Why are data centre developers leaving the UK?
A: Grid connection delays of up to eight years are the main culprit. Half of developers surveyed have already relocated projects to North Africa and Asia, where infrastructure approval processes move faster and power supplies are more readily available.
Q3: What’s causing the massive spike in electricity demand?
A: Artificial intelligence workloads require enormous computing power, which translates to massive electricity consumption. AI training and inference operations run continuously, unlike traditional computing workloads that have downtime. Tech giants are competing fiercely for reliable power supplies.
Q4: Will the National Grid upgrade solve the problem?
A: The £30m “great grid upgrade” is a start, focusing on projects that can come online before 2030. However, with 19 GW of new data centre capacity planned over five years and connection requests tripling since November 2024, it’s unclear whether infrastructure can scale quickly enough to meet demand.
Q5: Why are data centres concentrated around London?
A: Proximity to the City’s financial services, European connectivity hubs, and deep technical talent pools make London ideal for data centre operations. Low-latency connections to trading platforms and business clients are critical, which favours locations near economic centres rather than remote areas with cheaper power.
DISCLAIMER
Effective Date: 15th July 2025
The information provided on this website is for informational and educational purposes only and reflects the personal opinions of the author(s). It is not intended as financial, investment, tax, or legal advice.
We are not certified financial advisers. None of the content on this website constitutes a recommendation to buy, sell, or hold any financial product, asset, or service. You should not rely on any information provided here to make financial decisions.
We strongly recommend that you:
- Conduct your own research and due diligence
- Consult with a qualified financial adviser or professional before making any investment or financial decisions
While we strive to ensure that all information is accurate and up to date, we make no guarantees about the completeness, reliability, or suitability of any content on this site.
By using this website, you acknowledge and agree that we are not responsible for any financial loss, damage, or decisions made based on the content presented.
