Investment in data centers in the UK is being hampered by delays in securing electricity supplies, according to David Sleeth, chief executive of Segro, one of the country’s largest commercial property developers.
Speaking to Radio Times, Sleeth expressed frustration with long wait times for network connections, which can stretch into 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 ambitious plans for expansion, but these are hampered by bottlenecks in the national electricity grid. “The single biggest barrier is access to energy,” Sleeth said, highlighting that these delays are not only hindering Segro’s growth, but also the UK’s digital progress.
Data centers, which support essential digital services from streaming and online shopping to AI development, require significant power for their high-powered equipment, which needs specialized network connections to operate securely. However, the current system of waiting for a network connection is described by Sleath as “outdated,” with developers facing years of delays in upgrading capacity.
Beyond immediate needs, Sleeth expressed concerns about the UK’s long-term energy security. While he sees wind and solar energy as critical components of the country’s energy strategy, he suggests that further investment in alternative sources, such as nuclear power, or significant progress in battery storage will be necessary to meet future demands.
The government has recently taken steps to recognize data centers as critical national infrastructure, with Technology Minister Peter Kyle moving last month to classify such facilities as such. The decision comes as several US companies plan to invest £6.3 billion in new data centers in the UK, underscoring the demand for reliable infrastructure to support the booming digital economy.
National Grid has announced its commitment to improving connectivity, pledging to work with the National Energy System Operator (Neso), Ofgem and the Government to reform the connectivity system and prioritize projects that support net zero goals and economic growth. A government spokesperson confirmed this commitment, noting that efforts are underway to finalize stalled projects and streamline access to data centers seeking to connect to the network.
As demand for data centers continues to rise, the UK faces a critical moment in modernizing its infrastructure to support immediate needs and long-term digital ambitions.