Data centre investment in the UK is being stymied by delays in securing electricity supply, according to David Sleath, CEO of Segro, one of the country’s largest commercial property developers.
Speaking on Times Radio, Sleath expressed his frustration at the long wait times for grid connections, which can stretch to several years, preventing Segro from investing “hundreds of millions and more” into new data centres.
Segro, which already operates 35 data centres across the UK, has ambitious plans to expand, but these are hindered by bottlenecks in the national electricity grid. “The single biggest constraint is access to power,” said Sleath, highlighting that these delays are holding back not only Segro’s growth but also the UK’s digital advancement.
Data centres, which support essential digital services from streaming and online shopping to AI development, require substantial power for their high-energy equipment, which needs specialised grid connections to operate safely. However, the current queue system for obtaining a grid connection is described by Sleath as “archaic,” with developers facing years of delay for upgraded capacity.
Beyond immediate needs, Sleath voiced concerns about the UK’s longer-term energy security. While he sees wind and solar power as critical components of the country’s energy strategy, he suggests that further investment in alternative sources, such as nuclear energy, or significant advancements in battery storage will be necessary to meet future demands.
The government has recently taken steps to recognise data centres as critical national infrastructure, with technology secretary Peter Kyle’s move last month to classify these facilities as such. This decision comes as several American firms plan to invest £6.3 billion in new UK data centres, underscoring the demand for reliable infrastructure to support the burgeoning digital economy.
National Grid has stated its commitment to improving the connection process, pledging to work with the National Energy System Operator (Neso), Ofgem, and the government to reform the connection system and prioritise projects that support net-zero goals and economic growth. A government spokesperson echoed this commitment, noting that efforts are underway to clear stalled projects and streamline access for data centres seeking grid connections.
As demand for data centres continues to rise, the UK faces a critical moment in upgrading its infrastructure to support both immediate needs and long-term digital ambitions.