UK election may unlock access to new data center capacity

Already, Deputy Prime Minister Angela Rayner, who also leads the Department for Levelling Up, Housing and Communities, has decided to reconsider two planning applications for proposed data centers, in Buckinghamshire and Hertfordshire, that were previously rejected by local authorities.

According to PublicTechnology.net, the proposals, both by investment company Greystoke Land, were for an 84,000 square-meter facility in Hertfordshire, and a 72,000 square meter facility in Buckinghamshire.  

Power to the people

Governments may have the power to approve planning applications, but city planners aren’t the only brake on data center construction: The capacity of electrical distribution networks is a factor, too, and the overloaded network to the West of London is putting data centers in competition with new housing development.

In 2022, the Greater London Authority (GLA) released a report titled “West London Electrical Capacity Constraints,” indicating that new electrical installations over about 1MW in the London boroughs of Ealing, Hillingdon, and Hounslow would have to wait “several years” for connection to the distribution network.

The new government’s policy changes, experts say, will also have a flywheel effect where this policy focus will bring in billions of dollars of investments from likes of Amazon and others building more cutting edge infrastructure for AI as well as more jobs, potentially leading to a greater need for new housing in the area.

Market researcher Arizton Advisory & Intelligence forecasts that investment  in UK data centers will rise at 2.7% a year to reach $10.13 billion in 2029. There are plenty of blockbuster projects contributing to this total: In January this year, Google announced investment of $1 billion to set up a data center in Waltham Cross, Hertfordshire, while in November Microsoft announced plans to invest $3.2 billion over three years to set up AI data centers in the UK.