UK datacenter developers turn to gas rather than wait for grid power for builds
- Reference: 1756462087
- News link: https://www.theregister.co.uk/2025/08/29/uk_dc_gas_install/
- Source link:
The British government unveiled plans at the start of the year to [1]ramp up the country's AI development , allowing for the building of lots of additional infrastructure – datacenters in particular – including the setting up of so-called "AI Growth Zones".
However, the UK's moribund planning process sometimes leads to waiting years for new projects to get connected up to the electricity grid. The chief executive of Segro, a major commercial property developer, [2]said last year that it sometimes takes "a number of years" for local substations to be upgraded in order to increase grid capacity.
[3]
Now it appears that some developers are tired of the wait and are looking to generate their own electrical power on-site instead. National Gas, the operator of Britain's gas pipeline network, has confirmed that five large datacenter projects in the south of England have made enquiries about connections, as first revealed by [4]The Financial Times .
[5]
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This is a situation that has already played out across the Atlantic, with pipeline companies in the US disclosing last year that they were getting lots of interest from bit barn operators to [7]supply them with large quantities of natural gas because of delays in getting wired up to the grid.
Typically, the end result is the campus gaining a small on-site power station to supply electricity for the individual data halls. This is most likely generated by gas turbines, although in some cases solid-oxide fuel cells might be used, as is the case in [8]some sites managed by global datacenter giant Equinix.
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National Gas said it could not disclose specific details relating to any of the requests for reasons of commercial confidentiality, but it told the FT that the five sites combined would require roughly 2.5 gigawatts of capacity, enough electricity to power a couple of million homes.
This highlights some of the problems faced by the UK government when it comes to its ambitious plans to push AI everywhere as a driver for economic recovery. This will see lots of new datacenters popping up everywhere to power this revolution, all of which need powering. Energy demand from bit barns is [10]forecast to grow 500 percent over the next decade as a consequence.
"We are going to build more labs, more datacenters - and we're going to do it much, much more quickly," Prime Minister Keir Starmer said during the [11]opening address of London Tech Week in June.
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But a report from the Tony Blair Institute for Global Change [13]warned earlier this month that Britain is unlikely to meet its 2030 target of having 6 GW of AI-ready infrastructure on UK soil, blaming planning and permit delays as well as constraints with the national grid.
The government formed the AI Energy Council earlier this year, made up of a cozy cabal of big cloud operators and the energy industry, plus Technology Secretary Peter Kyle and Energy Secretary Ed Miliband.
This was charged with ensuring the UK's energy system is ready to support the necessary AI and compute infrastructure, but has so far operated under a veil of secrecy, revealing little regarding what happened during its two meetings held so far.
We inquired again what actions the AI Energy Council is taking to upgrade the National Grid so that it can cope with the increasing electricity demands of datacenters along with everything else?
"Through the AI Energy Council, we are bringing together the likes of NESO, EDF, Microsoft and Google in solving the energy challenges of AI, as we realise its potential to deliver economic growth," a spokesperson for the Department for Energy Security and Net Zero told us.
[14]UK unveils plans to mainline AI into the veins of the nation
[15]Datacenter developer says power issues holding up new builds
[16]Gas pipeline players in talks to fuel AI datacenter demand
[17]Equinix signs deals for nukes and fuel cells to power its AI bit barns
"We are also working with Ofgem and network companies to reform the outdated connections process and speed up delivery of new infrastructure, freeing up grid capacity to make it easier for datacenters to secure a timely connection."
We understand that the government's Industrial Strategy, published in the summer, laid out further steps intended to help get "strategic demand projects" such as datacenters connected to the grid, including a new connections accelerator service expected later this year.
In the meantime, those big bit barn developments are looking to provide their own power, but this can bring its own set of issues. Elon Musk's xAI caused uproar this year over [18]its massive datacenter in Memphis, Tennessee , which is alleged to be emitting large amounts of air pollution from its gas turbines. ®
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[1] https://www.theregister.com/2025/01/13/uk_government_ai_plans/
[2] https://www.theregister.com/2024/10/29/datacenter_developer_says_power_issues/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructuremonth&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aLHOmNVLpITvPuNhV1DKngAAAFE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.ft.com/content/75407616-1328-4ab8-9d81-a9dc18de920d
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructuremonth&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aLHOmNVLpITvPuNhV1DKngAAAFE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructuremonth&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aLHOmNVLpITvPuNhV1DKngAAAFE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2024/08/11/pipeline_operators_ai_demand/
[8] https://www.theregister.com/2025/08/14/equinix_signs_deals_for_nukes/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructuremonth&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aLHOmNVLpITvPuNhV1DKngAAAFE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2024/03/27/ceo_of_uks_national_grid/
[11] https://www.theregister.com/2025/06/09/uks_isambardai_super_powers_up/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructuremonth&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aLHOmNVLpITvPuNhV1DKngAAAFE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2025/08/04/tony_blair_institute_says_uk/
[14] https://www.theregister.com/2025/01/13/uk_government_ai_plans/
[15] https://www.theregister.com/2024/10/29/datacenter_developer_says_power_issues/
[16] https://www.theregister.com/2024/08/11/pipeline_operators_ai_demand/
[17] https://www.theregister.com/2025/08/14/equinix_signs_deals_for_nukes/
[18] https://www.theguardian.com/technology/2025/apr/24/elon-musk-xai-memphis
[19] https://whitepapers.theregister.com/
Easily turned off and onable.
The grid frequency rises in response. They DCs reconnect to the grid causing the frequency to fall again. Rinse and repeat while the folks trying to balance the grid are losing their fucking minds. Yes, a GW is too much to be counteracted by dynamic frequency response.
But to tie in to the grid, generators need to be able to handle synchronisation. Which is what battery farmers make a lot of money doing, ie trying to keep a nice, steady 50Hz because wind and solar subsidy farmers can't do that. Plus CCGTs can load follow and ramp up/down power based on demand.
But also this-
https://notalotofpeopleknowthat.wordpress.com/2025/08/22/natural-gas-price-trends/
As we can see, real prices this year are no higher than they were in 2018.. But ignoring COVID and Ukraine, current gas prices are not excessive by historical standards, and therefore cannot explain why electricity prices are so high now
The meme goes that gas sets the price of electricity, which is why it's so high. Except gas prices have been falling and it's 'renewables' and the attached subsidies that set the price. And there is growing realisation of this truth, and pressure to reduce or remove these subsidies to bring down the price of electricity and thus reduce inflation. So I suspect DC builders are aware of this, and know that by building CCGTs they can provide cheap electricity. Then export any surplus when winds are low, or it's dark, and claim the subsidies for synchronisation & stabilisation.. Especially when CCGTs will make it easier to balance the grid.
And then if sin taxes are removed from CCGTs, costs will be lower and if gas prices fall due to reduced demand as a result of decarbonisation, it'll be trebles all round. Except maybe from the operators of battery/subsidy farms because CCGTs would undercut their services.
I suspect there'd also be arbitrage opportunities for the DC users, ie being able to shift their workloads to places where electricity is cheap and export more electricity where it's high.
Re: Scenario
Well, these are "enquiries" about a gas connection. I doubt there's multiple instances of 500MW spare gas transport capacity in the UK locations most DC developers favour.
Could perhaps build adjacent to a gas import terminal, but that assumes continuous gas availability which may be hard to achieve, and in the South East that's only the lower Thames estuary (Grain). There's perhaps some options for where the North Sea pipes come ashore at Bacton in rural Norfolk. Other than that they're looking at former industrial sites that used 500MW of gas, I'm guessing that's not a long list.
Re: Scenario
As a rural-Norfolk dweller, could I mention how pissed off we already are with energy projects being dumped on us? There's only so much compulsory purchase and destruction of businesses, communities and lives that you can get away with before the pushback turns from vocal to direct.
Re: Scenario
What you've described is something akin to a subharmonic oscillation which can occur with power grids. A 0.3Hz subharmonic oscillation was blamed as one possible trigger of the recent Iberian power outage. Essentially a load of power stations, including renewables, all tripped simultaneously as something didn't appear 'right' to them, and it caused the grid to collapse in full.
There are precautions put into grid tied loads around ramp rates and switching frequency which should minimise them, though these systems are extremely complex and interactions can still occur.
Hmm
"National Gas said it could not disclose specific details relating to any of the requests for reasons of commercial confidentiality, but it told the FT that the five sites combined would require roughly 2.5 gigawatts of capacity, enough electricity to power a couple of million homes.
Private business can do it, government cannot. Civilisation requires energy, this isnt negotiable. The UK needs a government willing to drop the green religion nonsense and get power generation on the grid
Re: Hmm
Yeah, allowing private enterprise to dictate the agenda has worked out so well for the UK over the last 40 years.
Re: Hmm
"Yeah, allowing private enterprise to dictate the agenda has worked out so well for the UK over the last 40 years."
Well except that private enterprise hasn't dictated any of the agenda, and I should know having worked as a strategy manager for two of the largest energy suppliers for over a decade. Almost all of the capital deployed is private, all of the costs to pay for that are simply added to energy bills, but all of the decisions are made by or in direct response to government policy. EVERYTHING in the energy sector is under the rigid control of government. In addition to direct legal obligations, prohibitions, subsidies and taxes, there's also government's defacto control over all the system codes that dictate what is permitted and how it will work.
Why's there no coal fired plant in the UK? Because government policy changed the rules so that it became economic.
Why was Hinkley Point C approved when the commercials make no sense? Government policy (after a decade of dithering).
Why are government already talking about plans to build Sizewell C, a project that former EdF execs describe as being the last EPR that will ever be built, simply because the EPR design is overly complex, overly costly, and UK regulators have doubled down to make the complexity and cost even greater than the reference EPR design? Government policy.
Why are we building huge amounts of guaranteed-return but low grade output solar farms? Government policy.
Why are we betting the farm on wind power without any affordable storage or standby generation? Government policy.
Why are people building lots of international connectors to countries that in future years probably won't have much in the way of exportable surpluses? Government policy.
Why are bill payers (and to an extent taxpayers) on the hook for the circa £3-4bn cost of badly managed energy suppliers going bust? Government policy.
Why are tens of billions being promised to unrealistic hydrogen energy ideas? Government policy.
Why are renewable power plant being paid for energy that the grid can't accept? Government policy.
Why has around £20bn been wasted on useless bloody smartmeters? Government policy?
Are you seeing the trend here yet?
Re: Hmm
EVERYTHING in the energy sector is under the rigid control of government.
Sure - until a lobbyist picks up the dinner tab. Amazing how flexible rigid control gets over steak and wine.
Re: Hmm
"Sure - until a lobbyist picks up the dinner tab. Amazing how flexible rigid control gets over steak and wine."
Some areas of government policy are very susceptible to lobbying - anything "sexy" from the perspective of a special adviser looking to score a few points for the minister by association with large or famous companies. Hence the push on AI, the grovelling to US corporate tax dodgers, the puffery on domestic science and research (that government don't actually support or understand). But on things like energy, transport, retail, education, health etc, I can assure you that government resolutely ignores most forms of lobbying or even constructive feedback. In energy they prefer the sound of whale song and the dream of net zero to listening to people who know what they're talking about. I offer as an example smart meters. Energy suppliers were clear in their responses to government consultation that they did not have the skills or money to implement the government's eco-wet-dream of smart metering, and that we were unconvinced by the savings government used to justify the programme. Government stuck its fingers in its ears, singing la-la-la-la-can't-hear-you, and made it a legal obligation on them. A decade and a half later we've got an utterly failed programme of smart metering with programme costs of £20bn for next to zero benefit. Who'd have guessed?
Re: Hmm
Your own example proves the point. You call smart meters a £20bn failure. But failure usually comes with consequences - sackings, clawbacks, investigations. None of that happened. Nobody lost their job, nobody lost a bonus. The money just flowed neatly from the public purse into private pockets. That’s not failure, that’s the system working exactly as intended.
And the fact that consultation responses were ignored doesn’t mean lobbying doesn’t work. It just means the government was listening to different lobbyists. Public consultations are a box-ticking exercise - the policy is usually already written. That’s how the game is played
Re: Hmm
Not forgetting ...
Why entertain & then fund the ludicrous idea of blocking out the Sun? Government policy.
Why will there be blackouts? Government policy.
Why are energy bills too high? Government policy.
Why will the country be broke? Government policy.
Re: Hmm
@wolfetone
"Yeah, allowing private enterprise to dictate the agenda has worked out so well for the UK over the last 40 years."
Dictate what agenda? They are setting up power generation that they need. The UK gov for the last couple of decades hasnt been doing so and instead intentionally throwing the money at not providing power generation.
Re: Hmm
>” They are setting up power generation that they need.”
Very tempting to say: finally…
It is about time businesses started to include the full capital costs of their largescale ventures in their investments, rather than simply expecting others and specifically governments/tax payers to subsidise them. In this instance the DC operator will have to directly handle and account for the emissions…
>” The UK gov for the last couple of decades hasnt been doing so”
It does seem one of the skills of Westminster politicians, since at least the 1980s, has been the ability to keep kicking the ball down the road… why upset voters and invest/spend when you can make excuses and leave it for a future government…
Re: Hmm
The problem here is exactly that private companies are not building the grid out quick enough, almost the entirety of the UK electricity and gas grid is privatised. The only bit that isn't right now is UK ESO (grid stabilisation services) and that was only brought back into government control a year ago.
Re: Hmm
@Tom66
"The problem here is exactly that private companies are not building the grid out quick enough"
How can they, the grid isnt under private control. Power generation is most certainly not under private control, we know this as the government shuts down power generation and has unreliable sources built instead. Not the grid problem isnt a grid problem, it is a government pushing unreliables problem which then needs excessive grid upgrades to make it work a little bit more of the time.
"almost the entirety of the UK electricity and gas grid is privatised."
It is tempting to say this but then imagine trying to do anything. Imagine trying to source gas, the gov bans Russia and fracking. Imagine trying to build a fossil power station, the government wants net zero so no. Imagine wanting to build a nuke, the gov holds the project up for a long time and picks the winners. Imagine wanting to make a bunch of turbines where they are useless, the gov throws money at it and customers get the green tax on their bills and a shortage of power leading to higher prices.
This is to keep the lights on and civilisation going in the UK. The UK gov complains about a lack of gas storage while commanding that fossil fuels are to be banned before such storage would make any money for anyone providing it. This is not a private problem, these data centres aint waiting for grid permission and government stupidity. The private businesses are building their own generation
Re: Hmm
How can they, the grid isnt under private control.
Oh dear. You fell at the first hurdle. Nul points.
Re: Hmm
@AC
"Oh dear. You fell at the first hurdle. Nul points."
Nope. If you had any confidence in your comment you wouldnt post as a coward but would you like to explain how you are wrong so we can explain why you are wrong?
Re: Hmm
"Private business can do it, government cannot."
Keep fighting for the rights of private concerns to make oodles of profits for the wealthy off the back of the plebs public services!
Keep them distracted with talk of "green religion" nonsense! (While they happily accept choking to death on their own effluent.)
You are a true ally, Madam. A true super heroine. "Miss Information"?
We at the top are grateful for your services.
Data shed
The UK is talking about “AI Growth Zones” while the grid can’t even handle plugging in a few new bit barns. Developers are being pushed back onto gas turbines like it’s 1974, all while the government insists every household should have an electric car. We can’t power a single datacentre, but apparently we’ll be fine charging 30 million EVs overnight.
Meanwhile, ministers boast about “world-class infrastructure” while allowing facilities with no proper grid redundancy to call themselves datacentres. Let’s be clear: if a site doesn’t have at least two independent grid feeds, two separate power sources, and its own backup generation, it’s not a datacentre. It’s a shed full of computers with a marketing budget.
It's the UK.
Not enough staff, not enough kit, not enough money. Which may not be a bad thing, as the AI fad will deflate before they have wasted too much cash building big empty sheds. I guess they could recycle them as places to hold migrants, away from angry gangs of Reform activists.
All of this will become moot in a few years when Labour get kicked out and Kyle toddles off to a top job with his tech bros.
Given the way the economy is going, companies are more likely to save money by using their old systems until GAFA EOL them, and then revert to paper. I am actually considering switching back to sending some offers out on paper. It is a malware-proof solution and will only take a couple of days extra. As I have to wait 30 days for payment anyway, that is not an issue.
The new 'dash for gas' is a real nostalgia fest. I remember the original. That was to make the most of North Sea reserves. Now they are closing the rigs down, so we will presumably be importing more from the US to keep Donald happy. Good job that whole climate change thing turned out not to be such a problem, eh?
Re: It's the UK.
not enough money
There is plenty of money - see record profits. It's more about the classist and feudal mentality people at the top have and general contempt for working people. Why the pleb should earn decent wages if they can go to food banks etc. Oh, the pleb doesn't want to work for pittance? Lemme call Home Clownoffice to get me more poverty accustomed immigrants to exploit.
Re: It's the UK.
"There is plenty of money - see record profits."
I think we're drifting away from the topic here of DC owners hoping to build their own power plants, but I'll take the risk and assert that in the UK energy sector, the real money is not made by energy suppliers or even by asset owners, but though secured lending for energy projects. A bottomless wishlist of government projects, most project development and performance risk is loaded onto the constructors and manufacturers, there's zero bad debt risk because the guaranteed returns are simply added to energy bills, there's usually no inflation risk because (idiotically) the guaranteed returns are linked to CPI, if the grid can't take the power the asset owner still gets paid. Why would banks want to lend to SMEs, or to businesses who employ people and take real commercial risk when they can fill their boots with free money in the net zero gold rush? And because it's so de-risked, it's perfect for financial engineering into nominally different risk tiers, for securitisation, for syndication etc.
Then successive governments gormlessly look at their shoes and wonder why there's no growth in the UK economy.
Please clarify
Precisely what will a huge expansion of computer processing power enable us to do that we cannot already?
Shall it hasten colonisation of Mars? Will we finally discover that our universe is a simulation? Is abject poverty to be eradicated? Perhaps, it will be channelled into weapons production?
At the backs of Mr Blair's and Mr Starmer's minds maybe this is a profitable wheeze for staving off invasion by hordes of Slavic and Chinese people; good luck with that, whilst Britain's aircraft carrier is being towed around Taiwan, people easily cross the Channel in small boats.
Scenario
I don't know enough about DC power systems to know if this is realistic.
Say you have a lot of big bitbarns connected to the grid. For whatever reason, the grid frequency drops to 49.5Hz. A GW of DCs switch to internal power. The grid frequency rises in response. They DCs reconnect to the grid causing the frequency to fall again. Rinse and repeat while the folks trying to balance the grid are losing their fucking minds. Yes, a GW is too much to be counteracted by dynamic frequency response.