Part three: how rapid data centre expansion is testing the UK’s planning and infrastructure regime – the power struggle

In part one of this three-part series we explored the role of the UK’s planning system in data centre development. In part two we turned to environmental constraints. In our final instalment, we examine what has quickly become an issue for the sector: power.

The availability, timing and source of electricity now determine not only the viability of individual projects, but increasingly the geography and pace of data centre growth across the UK and beyond. We consider how the power challenge is evolving, before exploring how the sector is responding with increasing innovation.

The problem facing the sector

The core issue remains grid access. Connection queues in many parts of the UK have grown significantly, with projects frequently facing waiting times measured in years rather than months. As a result, grid connection has effectively become the critical path for project delivery, regardless of progress on planning or construction.

Recent regulatory reform seeks to address this. Ofgem’s TMO4+ regime introduces a “first ready, first needed, first connected” approach, intended to prioritise viable and strategically important projects. For data centres, which are recognised as critical infrastructure, this should in theory improve access to capacity. However, the introduction of readiness gateways and value-based criteria also introduces new risks. Developers must now demonstrate tangible progress earlier in the lifecycle, and where projects compete, the basis for prioritisation remains uncertain. The result is a system that is clearer in principle but still evolving in practice.

Beyond connection queues, a wider coordination gap persists. Delivering power to large data centres often requires new substations, upgraded cable routes and, in some cases, overhead line infrastructure. These elements can fall under different planning regimes and jurisdictions, creating fragmented pathways. Even when permission for the data centre itself is secured, the associated energy infrastructure may lag behind, delaying delivery and increasing cost exposure.

The rapid growth of AI workloads in particular has driven a step change in energy demand, with hyperscale facilities requiring ever larger capacities and higher power densities. This has sharpened competition between data centre developers, and other large energy users seeking electrification, such as advanced manufacturing and green hydrogen projects.

At the same time, the decarbonisation imperative has become more pronounced. Operators are under growing pressure to secure low-carbon energy sources, match demand with renewable generation, and demonstrate credible net zero pathways. This places further strain on already constrained networks and increases the complexity of procurement strategies. The question is no longer simply whether power is available, but whether it is available when needed, at scale, and in a form that aligns with sustainability commitments.

Industry innovation

In response, the sector is showing increasing innovation. On-site and private generation solutions are gaining traction, particularly where grid access is constrained. Gas-fired generation, including transitional solutions such as natural gas or hydrogen-ready turbines, is being used in some jurisdictions – for example, recent deployments in Ireland – to bridge the gap between demand and grid capacity. While not without controversy, such approaches can enable earlier delivery as longer-term grid reinforcements are progressed.

Other innovations include co-location with renewable energy assets, long-term power purchase agreements, and the integration of battery energy storage systems to manage peak demand and improve resilience.

An emerging and increasingly prominent area of innovation is the potential use of Small Modular Reactors (SMRs) to supply dedicated, low-carbon baseload power to data centres. Unlike traditional nuclear, SMRs are designed for scalability, faster deployment and potential co-location with large energy users. For hyperscale operators facing acute grid constraints, SMRs offer the prospect of long-term, reliable power independent of strained transmission networks, while also supporting net zero commitments. However, the model remains at an early stage in the UK, with regulatory, financing and public acceptance hurdles yet to be overcome. In the near term, SMRs are therefore better viewed as a strategic future solution rather than an immediate fix, but one that could materially reshape the relationship between data centres and power infrastructure over the coming decades.

These developments point to a sector that is adapting quickly, but within a framework that remains fragmented. Data centres are now critical national infrastructure, underpinning everything from financial services to public administration and emerging technologies. Yet the planning and energy systems that support them are not fully aligned with this status.

Taken together, the constraints explored across this three part series – planning, environmental and power – point to a sector at an inflection point. Delivery is no longer simply about scale, but about navigating complexity. The industry has shown incredible innovation already in tackling this complexity.

Beale & Co’s specialist team advises across each of these areas, supporting clients to overcome barriers, manage risk and deliver data centre projects in an increasingly demanding environment.

If you are planning or delivering a data centre development in the UK, our team can advise on key risks and help you deliver with confidence.