The datacentre energy deficit: How worried should operators be about power outages?
There has now been close to £40bn in new datacentre investment announced in the UK since the new government came to power in July 2024, and started turning its rhetoric about wanting to support the growth of the server farm sector into reality.
The government’s pro-growth stance towards the datacentre sector has landed well with industry stakeholders. Still, it cannot be ignored that long before Keir Starmer took over Number 10, concerns have circulated about the UK power grid creaking under the weight of demand from server farms.
It’s a topic Computer Weekly has covered on multiple occasions over the past decade, and an issue that’s been gradually becoming more acute and urgent as the demand for UK-based compute capacity from the hyperscale community has grown.
However, that was before we had a government in play that was intent on fast-tracking new datacentre developments to grow the economy by cashing in on enterprise and consumer demand for cloud-based services and artificial intelligence (AI). And with £40bn of new datacentre investment secured within the government’s first six months in power, it’s perhaps unsurprising that concerns about the impact all this potential development will have on the UK’s energy security and supply continue.
Particularly considering the pressure the government is under to decarbonise the grid by phasing out and replacing fossil fuels with renewable sources.
During a session at the March 2025 Datacentre World conference in London, Michael Drury, managing director of green energy consultancy Lucid Catalyst, said it’s a situation putting economies all around the world under pressure, as they figure out how to address the “energy gap” that could potentially open up in front of them.
“If you ignore datacentres, you still have to think of the energy gap that we’ve got that’s coming along, especially in countries that have existing [fossil fuel] power generation that is dropping off, and [a need to] provide the amount of energy and the demand that’s needed there,” he said.
Power consumption
Figures from the International Energy Agency (IEA) show that 460 terawatt hours of power were consumed by datacentres globally in 2022, with the organisation predicting this figure could double to more than 1,000 TWh by next year.
“If we look at how long it took to go from [zero] to 460 terawatt hours, the energy production timeline [shows] it took about 30 years,” said Drury.
“Additionally to that, we have the demand that’s growing outside of datacentres … so we have competition for that energy.”
And the industry is all too aware of that. A survey of 400 IT and business leaders from across the UK and US by electronics and computational design firm Cadence, released in early March 2025, revealed that 70% of respondents had concerns that national power grids were being “stretched to their limits” by datacentre developments.
Meanwhile, 83% said they had reason to believe their own datacentre developments are competing with residential energy demand, with 34% of this group “believing” the impacts of this to be great.
“This is significant because strained grids increase the likelihood of outages for both datacentres and homes,” said Cadence, in its accompanying Datacentre evolution: The innovation imperative report.
“This will not only have substantial financial implications for facilities, but will also increase public resistance to new datacentres and intensify pressure to make their operations more efficient.”
Grid connectivity issues
Ensuring there is enough power to go around is one thing, but another related issue is the time it takes for new developments to get connected to the grid.
As detailed in the National Infrastructure Commission’s (NIC’s) February 2025 Electricity distribution networks: Creating capacity for the future report, businesses of all kinds – not just datacentres – will want firm assurances that they will be able to access the power they need on a consistent and reliable basis before they invest in developments.
“And if a business can’t connect to the network promptly, they will delay investment decisions or worse, make those investments elsewhere, undermining the government’s growth mission,” the NIC report continued.
Figures from energy market regulator Ofgem confirm there is a 400GW pipeline of grid connection requests, which estimates suggest would take 10-15 years to clear and fulfil.
This delivery timeframe is undoubtedly problematic for datacentre developers looking to rapidly build out the infrastructure needed to help the UK government achieve its AI ambitions.
Particularly as the process of assigning grid connections has traditionally operated on a first-come, first-served basis, and – as confirmed by Ofgem – many of these applications are speculative in nature and may never come to fruition, so are simply blocking the queue for others.
What datacentre operators are left working with is a system where there are question marks over the surety of supply from the gird, and how long it will take to ensure they have a connection to it.
Reasons for optimism
And challenging though it may be, the picture is not as bleak as it could first appear. Ofgem, for example, set out plans in November 2023 to rid the grid connection queue of “zombie” projects from speculative developers.
This reworked system means developers must meet certain non-negotiable milestones within their connection agreements, and failing to do so will result in their projects being forced out of the queue.
The system also allows for energy generation and storage projects that will contribute to boosting the UK’s supply of energy to be fast-tracked.
In further support of that, Ofgem announced plans in November 2024 to speed up the time it takes to connect new green energy generation projects to the grid by prioritising initiatives that can be operational within five years and meet certain location and voltage criteria requirements, in support of the government’s net-zero goals.
Backup power supplies
John Booth, chair of the Data Centre Alliance’s (DCA) Energy Efficiency Steering Group, also told Datacentre World attendees about the infrastructure investment the government is making to safeguard the supply of energy the UK also imports from other countries.
“In the UK, we import anywhere between five to 15% of our energy from the interconnectors, [which] go across to France, Belgium, Netherlands, Norway and Ireland,” he said.
Currently, the UK receives 9.8GW of power from these interconnectors, and the government has plans to increase this capacity to 18GW by 2030, said Booth.
However, he also acknowledged that relying on interconnectors is a costly and potentially unsustainable way to ensure the UK has the power it needs to keep the lights on long-term. “This helps us in the short term, whilst we’re building our own capacity out, but for every pound that we spend on energy from the interconnectors is a pound that cannot be used in the UK to increase our capacity,” said Booth.
Also on the panel was Louisa Cilenti, co-founder and chief legal officer of datacentre compliance company Clear Decisions, who said – despite how rapidly the demand profile and UK energy mix is changing – she believes the UK is positioned to “comfortably” meet its future energy demand.
“The situation really does need quite careful planning and a lot more investment, [but] I think we’re going to be comfortably able to meet our future energy demand,” she said. “And I think the reason for that optimism is that we just have to look at our abundant renewable energy sources.
“We are accelerating wind, solar and battery [power] at a phenomenal speed … so [the question is] how much quicker can we get them onto the grid … and can we get the right type of power to the right place at the right time that’s affordable for the customer?” said Cilenti.
Picking up the conversation, Michael Clark, CEO of renewable energy consultancy Relode, said the UK has access to the energy it needs, but it is the underlying infrastructure and process involved with getting it to the right place at the right time that is the issue.
“I see [the problem here as] less of an energy gap and more of an infrastructure gap, [because] the biggest problem we have is that we are in this demand space, where we are now competing with an exceptional volume of renewable energy [for grid connections],” he said.
Clark name-checked the work Ofgem was doing to streamline the waiting list for grid connections for datacentres and renewable projects, but said more needs to be done.
“We have to really challenge that team that’s taking six months to decide how to change things, [and ensure] they consider this new type of demand in parallel with the renewable connections that are already in the queue – and not sequentially behind them. That, for me, is the gap,” he said. “Infrastructure needs to be fixed before we look at the energy.”
