London's data centre industry is embarking on an unprecedented expansion, with three major projects valued at over £10 billion unveiled in the past week. This surge, primarily driven by the colossal computing needs of artificial intelligence (AI), is simultaneously placing immense strain on the UK's electricity infrastructure, revealing significant power vulnerabilities.
Major Hyperscale Projects Announced
The development pipeline is dominated by hyperscale data centres, facilities specifically engineered for high-capacity AI workloads. Colt Data Centre Services has secured planning approval from Hillingdon Council for a £2.5 billion expansion of its Hayes digital park campus in west London.
This project will see three new hyperscale data centres and an innovation hub built on the site of the former Hayes Bridge retail park. It is set to boost the site's available IT power by 97 megawatts and is expected to create 500 permanent jobs. Construction is scheduled to begin in mid-2026, with the first data centre becoming operational in early 2029.
Simultaneously, Ark Data Centres has announced a £2 billion project near Watford, located at a former Mercure hotel site. The plans include up to six two- or three-storey data centres, forming a campus with a total capacity of up to 200 megawatts. Public consultation on this substantial development is already underway.
National Grid Under Immense Pressure
This rapid growth is exposing critical pressures within the UK's energy system. John Pettigrew, chief executive of National Grid UK, revealed that data centres now constitute more than half of all new electricity connection applications. A staggering 19 GW of new data centre facilities are planned over the next five years, a figure roughly equivalent to a third of the UK's current peak electricity demand.
The regulator, Ofgem, reported that contracted grid connection requests have skyrocketed from 41 GW to 125 GW since November 2024, with transmission demands increasing by 80 GW. This surge has been exacerbated by a flood of speculative applications from data centre developers, causing congestion and delaying projects that are ready to proceed. In response, screening measures are being introduced to prioritise viable schemes.
The severity of the grid connection delays is prompting an exodus of development. A recent poll by Roadnight Taylor found that over three-quarters of UK data centre developers are exploring sites abroad, facing connection delays of up to eight years. Half of all projects have already relocated due to these issues, with North Africa and parts of Asia emerging as popular alternatives.
Reforms and Government Action
In response to the crisis, the National Grid Group is investing in a £30 billion initiative to expand and modernise electricity networks in England and Wales over the next four years. Dubbed the 'great grid upgrade', this plan includes seventeen large-scale projects, such as new substations and enhanced grid connections for renewable energy and data centres.
The initiative aims to clear the connection queue by removing unviable projects and fast-tracking those that can be operational before 2030. The UK government is now working directly with the Grid and energy regulators to ensure that critical AI and digital infrastructure projects are not held back by energy bottlenecks, a concern famously summarised by Microsoft's statement lamenting the predicament of “having chips but no electricity.”
