Since being classified as critical national infrastructure last year, data centres quickly propelled into public consciousness in the UK.

As the digital backbone for a broad range of digital services, from gaming to digital banking to internet use, these facilities are booming. It is currently estimated that 477 are in operation across the UK today, which makes it the third-largest market in the world behind the US and Germany.

The number of data centres across the country is now expected to increase by almost a fifth, Barbour ABI tells the BBC, estimating that nearly 100 are expected to be built in the next five years. This, the company says, is on account of the rapid growth of AI, which increases the need for robust processing power.

Technology giants like Google and Microsoft are privately funding data centres in several areas of the country, including in Wales, Greater Manchester and Scotland. Microsoft is planning four new data centres costing £330 million (US$447 million) and Google is building two at a cost of £450 million ($609.59 million).

“The pace of AI innovation is not slowing down, and the data centre industry must continue to adapt,” said Jonathan Kinsey, EMEA lead and global chair for data centre solutions at JLL, at the start of 2025.

“AI’s transformative power demands have already reshaped our world, yet its most significant and enduring effect may lie in how we rise to meet the substantial energy demands required to fuel this technological revolution.”

Charting UK data centre growth

The UK suggested that it was behind in AI adoption and digital transformation, with plans put in place by the government to double down on its plans to make the country more of an infrastructure hub for cutting-edge technology advancement.

Continuing to align its initiatives with its ‘modern industrial strategy,’ the government highlighted its eagerness to make the country a leader in green digital transformation.

Speaking in Oxfordshire on 29th January 2025, UK Chancellor of the Exchequer Rachel Reeves unveiled plans to grow the UK economy to cement the country’s position as a catalyst of change and ultimately drive economic growth.

Part of these plans included changing up the planning system in the UK to speed up the delivery of new data centres to build more infrastructure and support AI-led developments.

“Data centres are driving the AI revolution,” Chancellor Rachel Reeves said at the time, emphasising that there is an urgent need for the UK 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.”

Confronting sustainability concerns

The data centre movement in the UK is inevitably leading to concerns about how much data centres consume energy and water to support these systems. Companies building and deploying data centres are having to consider environmental impact to make good on sustainability pledges and protect the nation’s grids.

In the US, data centres do consume large amounts of water and use evaporative cooling, which involves spraying water onto a heat exchanger in warmer environments.

New data centres are implementing closed-loop cooling systems, which recirculates coolant without requiring additional water. Microsoft first deployed this system in 2024 and said it could end up saving more than 125 million litres of water per data centre each year.

In the UK, Vantage Data Centers’ LHR1 London data centre campus reportedly uses a highly efficient closed-loop chilled water system generated through air-cooled chillers.

“The cooling system also includes an integrated economiser capability that allows reduced compressor energy based on outside ambient temperature, so when weather is favourable, cooling becomes more sustainable and less resource intensive,” Vantage explains on its website.

These types of systems could ease water shortage anxieties across the UK. It has been said that companies engaging with newer cooling technologies are able to run more efficiently and could adapt to help reach the UK government’s Net Zero 2050 policy.

Expanding the data centre industry in the UK is essential if the country wants to continue growing its digital economy and become a leader in AI. While companies need to consider sustainability challenges, there is a movement that considers innovative and energy-saving solutions that is supporting the UK’s progress towards its existing environmental pledges.

“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,” says Megan Pounds, Demand Generation Marketing Manager at Barbour ABI, via the company website.

“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.”

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