Data center investment in the UK is being hampered by delays in getting electricity, according to David Sleath, CEO of Segro, one of the country’s biggest property developers.
Speaking on Times Radio, Sleath expressed his frustration at the long wait times for grid connections, which can last several years, preventing Segro from investing “hundreds of millions and more” in new data centres.
Segro, which already operates 35 data centers across the UK, has plans to expand cheaply, but this is being hampered by the failure of the national electricity grid. “The biggest barrier is access to energy,” Sleath said, highlighting that this delay is holding back not only Segro’s growth but also the UK’s digital development.
Data centers, which support important digital services from streaming and online shopping to AI development, require a lot of power for their high-powered equipment, which requires a special grid connection to operate safely. However, the current grid connection system is described by Sleath as “antiquated,” with developers facing years of delays to improve capacity.
Apart from immediate needs, Sleath expressed concern about the UK’s long-term energy security. Although he sees wind and solar energy as important parts of the country’s energy strategy, he suggests that more investment in other sources, such as nuclear power, or significant improvements in battery storage will be needed to meet future needs.
The government has recently taken steps to recognize data centers as critical national infrastructure, with technology secretary Peter Kyle’s move last month to classify these centers as such. The decision comes as several US firms plan to invest £6.3 billion in new UK data centres, underscoring the need for reliable infrastructure to support the growing digital economy.
National Grid has stated its commitment to improving the interconnection system, pledging to work with the National Energy System Operator (Neso), Ofgem, and the government to transform the interconnection system and prioritize projects that support net-zero goals and economic growth. A government spokesperson emphasized this commitment, noting that efforts are underway to clear stalled projects and facilitate access to data centers seeking grid connection.
As demand for data centers continues to rise, the UK faces a critical time to develop its infrastructure to support both immediate needs and long-term digital ambitions.