The UK’s data centre industry is on the brink of a dramatic expansion, with nearly 100 new facilities set to be built over the next five years—a surge that could reshape the nation’s digital landscape. According to construction researchers Barbour ABI, who shared their analysis with the BBC, this nearly 20% increase will see the UK’s total number of data centres rise from its current 477 to well over 570 by 2030. That would cement the UK’s position as the world’s third-largest data centre market, trailing only the United States and Germany.
This boom is being driven by the insatiable appetite for artificial intelligence (AI) processing power. As AI tools become ever more embedded in daily life—from personalized school lessons to business record-keeping and even speeding up planning applications—the demand for robust, reliable digital infrastructure is skyrocketing. Megan Pounds, Demand Generation Marketing Manager at Barbour ABI, wrote on the company’s website, “As AI becomes an undeniable integration in our everyday lives, it’s also a major factor in driving the surge of Data Centre construction projects in the UK. The UK’s digital infrastructure is relying on more data centres to be built to store and manage data. However, where there is a rise in the demand of building more data centres, there’s also the expected spike in energy usage that must be addressed.”
Nearly half of the planned new facilities will cluster in London and its surrounding counties, but the expansion reaches far beyond the capital. Nine sites are planned for Wales, one for Scotland, five for Greater Manchester, and several others scattered across the country. Many of these developments are being bankrolled by US technology giants—Google and Microsoft among them—as well as major investment firms.
The most eye-catching project is a colossal £10 billion (US$13.6 billion) AI data centre in Blyth, near Newcastle, spearheaded by American private investment company Blackstone Group. The plan calls for 10 buildings covering 540,000 square metres on the site of the former Blyth Power Station, with construction slated to begin in 2031 and last more than three years. Microsoft, meanwhile, is investing £330 million (US$447.3 million) in four UK data centres—two in Leeds, one near Newport in Wales, and a five-storey facility in Acton, London—scheduled for completion between 2027 and 2029. Google’s two north-east London data centres, costing £450 million (US$610 million), will span 400,000 square metres in the Lee Valley water system area.
Why all this urgency? Data centres have become classified as critical national infrastructure by the UK government, recognizing their central role in the country’s economy and daily life. As digital services—from banking and gaming to cloud computing and AI—become foundational to business and society, these facilities are the invisible engines powering the nation’s digital future.
But this rapid growth isn’t without its headaches. The energy and water demands of new data centres are raising eyebrows among environmentalists, utility companies, and ordinary consumers alike. In the US, for example, newer data centres have been linked to rising household energy bills. Dr. Sasha Luccioni, AI and Climate Lead at machine learning company Hugging Face, told the BBC that in some American states, “average citizens in places like Ohio are seeing their monthly bills go up by £15 (US$20) because of data centres.” She described the UK’s construction timeline as “aggressive” and called for companies to bear the cost of the extra power they consume.
The National Energy System Operator (NESO) estimates that the growth in UK data centres could add up to 71 terawatt-hours (TWh) of electricity demand over the next 25 years. That’s a staggering increase, reinforcing the urgent need for clean energy sources such as offshore wind. The pressure on water resources is also mounting. Many existing data centres rely on large volumes of water for cooling, though operators often keep their consumption figures under wraps. Steve Hone, CEO of The Data Centre Alliance, noted, “Ensuring there is enough water and electricity powering data centres isn’t something the industry can solve on its own,” but he also emphasized that “data centres are fixated with becoming as sustainable as possible” by adopting measures such as dry-cooling methods.
Closed-loop cooling systems, which recirculate coolant instead of constantly drawing fresh water, are gaining traction as a solution. Microsoft, for instance, first deployed such a system in 2024 and reports it could save more than 125 million litres of water per data centre each year. Vantage Data Centers’ LHR1 London campus uses a highly efficient closed-loop chilled water system paired with an integrated economiser, allowing the facility to reduce compressor energy when outside temperatures permit—a move that makes cooling more sustainable and less resource-intensive.
Still, local opposition to new data centres is brewing in some areas. In Potters Bar, Hertfordshire, residents are campaigning against a £3.8 billion (US$5.2 billion) cloud and AI facility planned for greenbelt land. In North Lincolnshire, Anglian Water objected to a 435-acre data centre proposal, though the developer has promised to use closed-loop cooling systems to limit water use. Meanwhile, in Dublin, a moratorium on new data centres remains in place due to the strain they place on Ireland’s electricity supply; existing sites there accounted for a fifth of the nation’s total demand in 2023.
Twenty-eight of the planned UK data centres are set for areas served by Thames Water, including 14 more in Slough—which already boasts Europe’s largest cluster of such facilities. With water supply under mounting pressure, Thames Water has been in discussions with the government about how to manage demand from the burgeoning data centre sector. Water UK, the industry body, has confirmed that 10 new reservoirs are being developed in Lincolnshire, the West Midlands, and south-east England to help meet future needs.
Government officials say they’re taking these challenges seriously. A UK Government spokesperson told the BBC that data centres are “essential” and that an AI Energy Council has been set up to ensure energy supply keeps pace with demand. The government is investing £104 billion (US$141 billion) in water infrastructure, aiming to future-proof the UK against shortages as digital infrastructure expands. Earlier this year, Prime Minister Keir Starmer said, “Artificial Intelligence will drive incredible change in our country. From teachers personalising lessons, to supporting small businesses with their record-keeping, to speeding up planning applications, it has the potential to transform the lives of working people. But the AI industry needs a government that is on their side, one that won’t sit back and let opportunities slip through its fingers. And in a world of fierce competition, we cannot stand by. We must move fast and take action to win the global race. Our plan will make Britain the world leader. It will give the industry the foundation it needs and will turbocharge the Plan for Change. That means more jobs and investment in the UK, more money in people’s pockets, and transformed public services.”
Chancellor of the Exchequer Rachel Reeves echoed this ambition, stating, “Data centres are driving the AI revolution,” and emphasizing the urgent need to “speed up infrastructure delivery.” She added, “Investments and innovations go hand in hand … I am determined to make Britain the best place in the world to invest.”
The stakes are high. As AI and other digital technologies transform the way Britons live and work, the data centre industry’s growth is both a symbol of progress and a test of the UK’s commitment to sustainability. With innovative cooling systems, massive investments in water and energy infrastructure, and an ever-watchful public eye, the country’s digital future is being built—one data centre at a time.