Investment in the UK’s data centre sector is facing serious delays due to a shortage of electricity supply, according to David Sleath, CEO of leading property developer Segro. Speaking on Times Radio, Sleath shared his concerns about extensive wait times for grid connections, with delays stretching over several years, which he says has blocked Segro from channelling “hundreds of millions and more” into new data centres.
Segro, already operating 35 data centres nationwide, has significant expansion plans that are stymied by what Sleath calls a “bottleneck” in the national grid’s ability to provide power. “The single biggest constraint is access to power,” he remarked, emphasising that this challenge is holding back not only Segro’s growth but also the UK’s progress in digital infrastructure.
Data centres are critical to the UK’s digital economy, supporting services from e-commerce and streaming to advanced AI projects. However, their high-energy requirements demand specialised grid connections, and the current queue system for these upgrades is proving a major obstacle. Sleath described the grid connection process as “archaic,” with developers often waiting years to secure the necessary upgrades.
Looking ahead, Sleath also voiced concerns over the UK’s long-term energy strategy. While he recognises the importance of wind and solar in reducing carbon emissions, he suggests that additional investment in nuclear power and advancements in battery storage technology will be necessary to meet future energy demands.
In a positive step for the industry, the government has recently designated data centres as critical national infrastructure. Technology Secretary Peter Kyle’s classification move aligns with several American companies’ plans to invest £6.3 billion in new UK data centres, underscoring the need for reliable power access to fuel this digital expansion.
The National Grid has acknowledged the challenges and committed to improving the grid connection process, pledging collaboration with the National Energy System Operator (Neso), Ofgem, and government bodies to prioritise projects supporting net-zero objectives and economic growth. A government spokesperson confirmed ongoing efforts to streamline connections for data centres and clear project backlogs, aiming to make the UK’s grid infrastructure more accessible.
With the demand for data centres rising, the UK stands at a critical juncture, needing strategic grid reforms to support both immediate digital needs and long-term economic ambitions.
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