The UK data centre market is burgeoning as the global demand for data sets a record-breaking pace as the AI revolution continues.
Over the past few months, The SectorScope has covered several stories about the development of new data centres, or the extension of existing sites. In March 2024. Glenigan reported that a surge in new data centre projects across the UK was creating opportunities for the construction industry. This could last well into the next decade.
Key stories:
* In January 2024 it was confirmed that Google is expanding its data centre footprint in the UK with a new 33-acre campus in Waltham Cross, Hertfordshire. This represents a $1 billion investment.
* Plans for a £350m data centre from Kao Data was approved by Stockport councillors in March 2024.
* In April 2024, it was reported that equity company Blackstone Group is to transform a failed gigafactory site in Northumberland into a major European data centre hub.
* Also in April, Colt Data Centre Services (DCS) acquired land to carry out an expansion of its West London data centre to double its existing capacity.
* In May 2024, it was announced that the Humber Tech Park would be home to a £2 billion-plus hyperscale data centre. A first data centre is set to start construction in 2025.
* And most recently, at the end of May, Blackpool council revealed its vision of the seaside town as the ideal potential site for data centre expansion.
For anyone who’s grappling with the idea of the famous coastal resort as a new Silicon Valley, it helps to know that the town is home to the Celtix-Connect2 internet cable. This vital piece of digital infrastructure connects Blackpool to New York, Dublin and northern Europe as part of the North Atlantic Loop. It carries around one third of the world’s internet traffic.
What makes a good site for a data centre?
The UK is attractive as a site for data centres because our climate is relatively cool. While temperatures don’t get as low as in Norway or Sweden, our climate provides a low ambient temperature that reduces the need for data centre cooling.
But there are other factors at play. As will all commercial real estate, location is key. We can see this with one of the UK’s longest-established data centre hubs: Slough.
While Blackpool sets out its future path to attracting data centre investors, Slough in Berkshire has been a significant player since the early 2000s, with around 34 data centres already based there and more on the way. The BBC describes Slough Trading Estate as ‘considered to be the largest data centre hub in Europe’.
The town is close to London and Heathrow. Because it has an established history as a data centre hub, there is also a good supply of experienced technical employees.
The town’s proximity to London was important for its early customers who were largely London banks. Slough is outside London, which keeps important data safely at arm’s length, but close enough to keep data transfers speedy. Slough also lies on a major fibre optic cable link between the UK and the USA. Again, this leads to faster data transfer times even on a global scale.
If we look at the new developments, they share many of these characteristics. For example, the Kao Data development in Greater Manchester will be close to one of the fastest-growing tech and science centres in the UK. The city has a goal to become one of the UK’s largest high performance computing (HPC) and AI clusters outside of the London-Oxford-Cambridge triangle.
Like Slough, this area is already attracting graduates from local universities, but also other technical staff who are attracted to Manchester’s thriving city centre. Access to skilled staff is key in this field. Kao Data has plans to engage with local schools and colleges to establish links with education.
Addressing environmental issues – and energy sources
Increasingly, the data centre sector is aware of its environmental responsibilities. There is no escaping the fact that these buildings are high-energy users, with IT equipment and cooling systems being the largest proportion of that. Finding ways to tackle this issue is now a growing area of concern for developers – and data centre customers.
Internally, data centres are making the most of energy efficient cooling techniques. Liquid cooling is an option for modern facilities, but increasingly there is a view to use of renewable energy and low-carbon options.
The Humber Tech Park development is planning to apply a technique that’s already widely-used in Scandinavian data centres – heat reuse. Heat ejected from the data centre cooling system is captured and applied to heat networks to provide heating for homes and other local buildings.
The Humber Tech Park will sit on a 76-hectare site which will also be home to horticultural glass houses. Heat ejected from the data centre cooling system will be used in these. Estimates are that the agricultural output of the glasshouses will be about £3.5 million.
There is increasing interest in data centres as sources of heat energy for heat networks in the UK. The government regards growth of heat networks as a significant part of the country’s path to decarbonised heating in homes and other buildings. At the end of 2023, the government announced a £36 million grant to Old Oak Park Royal Development Corporation to construct a heat network using waste heat from data centres to provide heating to over 10,000 homes and 250,000 sqm of commercial space.
It is also increasingly important for data centre sites to be able to access energy without taxing the wider local infrastructure – even better if this is from a renewable source. In an interview with the BBC the Chief Executive of National Grid warned that the power used by data centres would increase six-fold in the next decade. This comes at a time when heating and transport are also switching to electricity.
So, ensuring that tomorrow’s data centres have a reliable and robust power supply is key for modern developments. Blackpool’s plans include the provision of at least 50MVA of renewable energy through an agreement with Electricity North West and a potential solar farm.
The next ten years
Growth is very much on the cards for the data centre sector in the UK. In the 2024 BESA Top 30 UK Contractors report, data centres were cited as a key market by many of the industry’s leading contractors.
They also pointed to availability of energy supplies as a major factor in the location of future data centre projects. This could lead to a shift away from traditional centres such as London and Slough, to areas where it’s easier to access power or even to develop on-site renewable supplies.
And on the theme of energy use, there’s no doubt that demand for energy-efficient cooling technology for data centres will grow. A focus on liquid cooling technology seemingly on the cards. Of course, there are plenty of legacy systems to maintain and bring up to standard, which will provide work for the maintenance and refurbishment specialists.
Although hyperscale data centres make for eye-catching headlines, the IT community sees an increasing need for local, edge data centres which are physically close to customers in cities. It seems likely that these smaller centres will become more necessary as it becomes more difficult to find the space – or the power supply – for larger facilities.
That said, the drive for energy efficiency will still apply at these smaller data centres. This can be challenging, as a recent study by the Uptime Institute highlighted that large data centres tend to be more energy efficient. This is often because the larger centres tend to be newer, but their greater size allows for more use of energy efficient approaches to cooling. Finding efficient cooling (and heat reuse) solutions for the edge of the cloud could be good business in the next decade.
The scrutiny of data centre energy use and environmental performance will become more intense. They are not immune from tightening targets on embodied and operational carbon, so even as their IT functions advance, the need to demonstrate ESG credentials alongside tech development will grow. It’s yet another challenge in a sector that is already at the cutting edge.