UK AI data centres eye gas power, testing net zero goals

Portrait of Scott Wapner
Scott Wapner
Portrait of Scott Wapner
Business Contributor
At SignedNews, Scott Wapner covers business. Scott Wapner hosts CNBC's Fast Money Halftime Report and Closing Bell from the New York Stock Exchange. His broadcasts feature...
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UK AI data centres eye gas power, testing net zero goals

Four planned hyperscale AI data centres in the UK, three of them in southern England, are weighing gas-fired power. The plans follow a new government rule that lets developers make their own electricity while they wait for a grid hookup, a shift that could threaten Britain's goal of net zero emissions by 2050.

If the four sites ran nonstop at full output, they would need roughly 1.3 gigawatts between them. One estimate puts their yearly carbon output near 4.1 million tonnes, more than Manchester, Liverpool and Southampton produce together.

Chancellor John Healey used his Budget speech to unveil a British Data Centre Covenant. Operators that commit to local spending, new jobs and safeguarding water would move up the queue for grid access. Healey also said developers could build onsite generation where no connection is available.

A grid that cannot keep up

The squeeze on the network is severe. Ofgem, the energy regulator, says developers want connections adding up to 72 gigawatts, while national peak demand last year was 45 gigawatts.

Some developers have been warned that grid upgrades needed to serve them could take up to 10 years. Nathan McWhinnie, who leads market intelligence and oversight at Ofgem, said some of these projects are as large as cities.

In a lot of places, the grid is at capacity. I think sometimes it's easy to forget the scale of the demand of these connections.

Nathan McWhinnie, head of market intelligence and oversight at Ofgem

Where gas is on the table

At Acre Slough, west of London, developers say gas engines of up to 49.5 megawatts could bridge a grid wait they expect to last at least a decade. At Wapsey's Wood, beside the M40 in Buckinghamshire, a proposed 200-megawatt gas plant could run until grid capacity arrives, which is not expected before 2040.

In Cardiff, a developer wants permission for a temporary energy centre with turbines of up to 49.9 megawatts, which planning documents say could run for as long as five years. Developer Curtis Hall has called the turbine option a worst-case scenario.

Quest Park has proposed a 1-gigawatt data centre in a former quarry pit next to the planned Universal theme park in Bedfordshire, roughly the load of 200,000 to 250,000 homes. Director David Kohler has said the energy mix is unsettled, that matching that load with solar would take land equal to 15% of Bedfordshire, and that the company is studying options that avoid burning gas. Each of the four projects says it will shift to grid supply once the network can handle its demand.

Government defends the policy

The government says onsite generation will be tightly controlled, time-limited and reserved for exceptionally strategic projects that cannot secure capacity any other way. Its priority, it said, is linking data centres to an increasingly low-carbon grid, and halting development would push jobs, investment and data abroad.

Government absolutely shouldn't be in the business of just saying anyone who wants to bring it here, can do whatever you like to power it, because that is not acceptable

Toby Perkins, chair of the Environmental Audit Select Committee

Critics are unconvinced. Toby Perkins, the Labour MP who leads Parliament's Environmental Audit Select Committee, said a big rise in natural gas use cannot be the future. Buckinghamshire councillor Ed Gemmell warned that approval would set a national precedent, and Oliver Hayes of the charity Global Action Plan cited local air pollution, noise and water use.

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At SignedNews, Scott Wapner covers business.

Scott Wapner hosts CNBC's Fast Money Halftime Report and Closing Bell from the New York Stock Exchange. His broadcasts feature interviews with influential investors and discussions of individual companies, industry trends, and developments moving the markets. He also wrote When the Wolves Bite, a book examining the clash between investors Bill Ackman and Carl Icahn over Herbalife.