Rising demand for datacentres is fuelled by rapid technological development and increased reliance on digital and AI innovations in personal and professional life.
The government’s research briefing, Datacentres: planning policy, sustainability, and resilience, estimated datacentre capacity could rise between 3.3GW and 6.3 GW by 2030. Additionally, the International Data Center Authority’s Global Data Centre Report 2026 stated datacentres account for 5.9% of the UK’s energy, above the government figure from 2025 of 2.5%.
The government also admitted the potential energy demand of the current pipeline of more than 100 datacentres seeking grid connections is 40% higher than initially thought.
In this fast-evolving sector, soaring demand is accelerating faster than rollout. This has presented a significant challenge to the industry, government and energy distributors.
Regardless of uncertainty over whether the grid now and into the future can bear the brunt of a British datacentre boom, developers and operators cannot afford to wait around.
Demand may be increasing in the pipeline, but there is still a long way to go to get projects underway and seize datacentre opportunities.
For it to be a success, rollout cannot be done without carefully considering and mitigating negative impacts on the surrounding community and environment. So, comprehensive and rational planning of sites at the outset becomes even more important. Who better to deliver that on British soil than those with understanding of the communities they are to be placed in and the processes they will have to negotiate?
Plan for now, plan for the future
Securing planning permission for datacentres remains a challenge in a rapidly evolving sector.
Operators, developers and investors continue to navigate a complex planning landscape, and often rely on specialist advisers to help bring projects forward.
Timescales are already measured in years rather than months. These are often extended further by delays in the planning system and grid connection process.
To keep pace with growing demand for digital infrastructure, cloud services and AI technologies, the sector cannot afford significant delays to delivery, especially from planning applications.
Proposals must incorporate the necessary level of detail from the outset, demonstrating both viability and deliverability, while providing confidence that a scheme can be brought online as quickly as possible.
Sites with planning permission secured are increasingly attractive to the market, commanding a premium over comparable land without planning consent as they offer greater certainty and reduce development risk.
The same principle applies to former industrial sites and power stations where high-voltage grid connections already exist, providing a significant advantage in an increasingly constrained energy environment.
For landowners with suitable sites, there is considerable opportunity to engage with strategic land and planning specialists to unlock value.
The process should begin with comprehensive site screening to assess the most appropriate land use. While a datacentre may be a viable option where factors such as scale, location, accessibility and energy infrastructure align, it is essential to evaluate all potential development opportunities to ensure the highest and best use is identified.
Once a clear strategy is established, the planning process can commence.
A robust and detailed planning application creates the foundation of the entire development lifecycle, influencing financing, insurance, design, construction and ultimately the marketability of the scheme.
As such, planning advice should not only focus on securing consent but also consider the practical requirements of delivery and operation.
A key component of this process is demonstrating how site-specific challenges will be addressed.
Power demand, grid capacity, utility provision and wider infrastructure requirements must all be considered and clearly articulated within the application.
Equally important is a detailed understanding of the local area, including planning policy, community considerations and regional factors that may influence decision-making.
A source not a drain for communities
In their role to mitigate the impact of sites, Ofgem launched a consultation to tackle “speculative datacentre projects” in the queue for grid connections.
While this is a positive step from the regulator to protect consumers, improve confidence in network planning and clear the way for viable projects to connect, this does mean project plans must stand up to scrutiny and be fully thought out.
One proposal in this is to introduce significant upfront commitment fees that could see larger offtakers paying between £237,500 and £712,500 per MW of contracted capacity to join the queue.
That means projects that are abandoned or that have fallen behind contracted milestones will face termination and loss of the commitment fee.
This significant financial commitment for developers and offtakers will likely mean many organisations are less inclined to bring forward speculative schemes.
Planning applications, designs or building schedules for datacentres will be under the microscope now more than ever. Any gaps in considerations could see projects left at the back of the queue, or become very unprofitable if considerable losses are made.
It is crucial that operators, developers and contractors in the space work with advisors and planning authorities to develop a bulletproof plan for projects to ensure such setbacks are avoided.
While grid capacity remains one of the greatest challenges facing datacentre development, there is growing potential for alternative energy solutions to support delivery.
In some locations, datacentres, and neighbouring businesses could be supplied by dedicated off-grid renewable energy generation and battery storage facilities located nearby, operating alongside a grid connection.
In certain circumstances, this may be facilitated through a Power Purchase Agreement (PPA), to provide greater energy security, cost certainty and sustainability credentials.
Here lies a significant opportunity for landowners and renewable energy developers to play a leading role in supporting the UK’s digital infrastructure growth.
Renewable energy projects that can help bridge supply constraints or supplement grid connections are therefore likely to become an increasingly important part of the solution. Those able to provide such solutions are likely to find themselves in an increasingly advantageous position.
In a market experiencing the level of growth currently seen within the datacentre sector, opportunities extend far beyond the development and operation of the facilities themselves.
Landowners who work proactively with strategic land, planning and energy advisers to secure consent for renewable energy generation and storage projects may also unlock considerable value.
Whether through the sale of land to energy developers, participation in joint ventures, or by acting as a corporate energy supplier, there is scope to capitalise on the growing demand for power infrastructure.
Funding a home grown boom
Home-grown SMEs could benefit significantly from the UK datacentre boom. Yet, in the immediate term, meeting the rapid growth in demand means business must scale quickly too.
Already contending with the current barriers to delivery, these smaller players are somewhat limited in what growth they can achieve, often unable to grow beyond smaller edge projects
To be able to compete with the significant financial capability of the global giants, businesses in the UK market must be able to take their slice of the investment pie.
We have seen the UK Government’s Sovereign AI venture fund recently backing a British computer chip unicorn, OLIX, which is a good example of using investment to support home grown business with scaling.
However, we know there is global investment and interest in the British AI sector, and plenty of companies across the supply chain who would benefit from a boost.
Working with advisors, these smaller and medium sized enterprises can not only secure the funding available from lenders across the globe, but also design a strategic business plan that lays out the path to success to secure buy-in. This can be intrinsically linked to project pipelines and identify the barriers when injections of funding can support the planning process, rollout of energy infrastructure or growth to meet demand.
A British AI supply chain with UK businesses operating at a global level could be a more resilient sector that isn’t at the mercy of global markets and shocks, not to mention the skilled career opportunities and regional economic benefits it would open.
Planning is the foundation upon which the success of the UK’s datacentre sector will be built. As the country seeks to realise the economic and technological potential of AI, the conversation must evolve beyond datacentres alone and focus on a wider strategic approach. The developers, landowners, investors or policymakers who recognise this broader picture will be best placed to help shape and benefit from the next phase of the UK’s digital infrastructure revolution.
Javid Patel is senior director and head of public sector & strategic advisory and transaction team at BTG Eddisons. Henry Pauncefort-Duncombe is director and head of strategic land at BTG Eddisons.
S 004