Brits to help foot power bill for datacenters under government AI plans
(2025/11/18)
- Reference: 1763462586
- News link: https://www.theregister.co.uk/2025/11/18/uk_ai_growth_zones/
- Source link:
While UK households face some of the world's highest energy prices, datacenter operators are set to receive electricity discounts under government plans to accelerate AI infrastructure development.
The Department for Science, Innovation and Technology (DSIT) outlined the move in a [1]package of policy reforms published on November 14, offering targeted pricing support for datacenters in designated AI Growth Zones.
Included are discounts of up to £24 per MWh in Scotland, up to £16 per MWh in Cumbria, and up to £14 per MWh in the North East. This is intended to boost the construction of more datacenters amid politicians' obsession with AI fueling economic recovery.
[2]
These regions were selected to ease grid pressure, we're told. Scotland's wind generation, for example, often exceeds transmission capacity.
[3]
[4]
"There are sometimes mismatches between the amount of electricity generated in a certain region and the electricity grid's ability to transmit that electricity from that region to another," the document explains.
"When datacenters locate in Scotland and the north of England, they can harness this generation, and reduce the overall cost of our electricity system."
[5]
The current thinking is it will also help rebalance investment across the UK, encouraging growth in regions with available clean energy.
The scheme will impose no additional cost on other electricity billpayers, the document claims, however, if discounts were to be covered by the government, that would still equate to ordinary people subsidizing energy bills for datacenters via their taxes.
We asked DSIT for comment, but it declined to give us an official statement.
[6]
American consumers already [7]face rising electricity bills as AI datacenter demand [8]strains regional grids , leading to higher wholesale prices. The UK could follow the same trajectory unless new energy supply matches the increased load.
The British government faces a dilemma: solar and wind are variable, [9]nuclear takes years to build , and gas plants contradict carbon reduction commitments. Yet the government has approved more gas capacity, and higher distribution network charges are already hitting consumer bills.
Despite recognizing the scale of the challenge, [10]officials lack a coherent plan to supply the massive energy requirements these datacenters demand.
The government's [11]AI Opportunities Action Plan , announced at the start of this year, is designed to accelerate AI datacenter build-outs by "streamlining" planning approvals and speeding power provisioning.
DSIT's policy paper says government needs to go further than the Planning and Infrastructure Bill now passing through Parliament. This includes updating national pllicy guidance to give "significant weight" to AI Growth Zones, creating a dedicated team of datacenter planning experts to advise local authorities, and fast-track approval for large projects as Nationally Significant Infrastructure Projects.
As The Register [12]reported last year, those planning reforms often mean removing the right of residents to object to any application to build massive server farms in their area.
[13]Britain's first small modular reactors to be built in Wales
[14]Equinix revealed as occupant of £3.9B UK datacenter campus
[15]Britain's AI gold rush hits a wall – not enough electricity
[16]Microsoft pens $15B love letter to the UK with 23,000 Nvidia GPUs attached
To speed connections to electricity supply, the government aims to remove speculative demand in the grid connections queue. These are requests related to building projects that never got off the ground but weren't cancelled.
[17]400 GW of outstanding requests for connection to the power grid around London alone was estimated by real estate biz Cushman & Wakefield in February, and energy regulator Ofgem said 60-70 percent of these were so-called "zombie projects."
This isn't just a local issue – the US Energy Secretary [18]recently ordered measures to speed grid connections and deter speculative projects.
UK government also wants to reserve future capacity for AI Growth Zones, and work with Ofgem to allow developers to build and connect their own high-voltage transmission lines and substations, rather than waiting for the energy companies to do it. This move was [19]advised by energy management biz Schneider Electric.
Datacenters within AI Growth Zones will qualify for a special Connections Accelerator Service offering "enhanced engineering support" with a view toward finding "creative solutions to connection delays."
A dedicated AI Growth Zone Delivery Unit within DSIT will "act as a single point of contact for investors and developers interested in partnering on delivering AI Growth Zones." This is to identify suitable sites and investors for a project, and ensure each designated AI Growth Zone is delivered on time and in scope, the paper says, with the service set to formally launch in January.
One question the policy paper fails to address is whether Brits will accept subsidizing datacenters while their own energy costs remain among the highest globally. The Reg suspects it knows the answer. ®
Get our [20]Tech Resources
[1] https://www.gov.uk/government/publications/delivering-ai-growth-zones
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.bloomberg.com/graphics/2025-ai-data-centers-electricity-prices/
[8] https://www.cnbc.com/2025/11/14/data-centers-are-concentrated-in-these-states-heres-whats-happening-to-electricity-prices-.html
[9] https://www.theregister.com/2025/11/13/anglesey_smr/
[10] https://www.theregister.com/2025/10/17/in_britain_talk_is_cheap/
[11] https://www.theregister.com/2025/01/13/uk_government_ai_plans/
[12] https://www.theregister.com/2024/09/17/objections_to_datacenter_builds_cni/
[13] https://www.theregister.com/2025/11/13/anglesey_smr/
[14] https://www.theregister.com/2025/10/30/equinix_datacenter_hertfordshire/
[15] https://www.theregister.com/2025/10/17/in_britain_talk_is_cheap/
[16] https://www.theregister.com/2025/09/17/microsoft_uk_ai_cash/
[17] https://www.theregister.com/2025/02/10/london_has_400_gw_of/
[18] https://www.theregister.com/2025/10/24/doe_datacenter_grid_connection/
[19] https://www.theregister.com/2024/10/25/schneider_exec_dc_power/
[20] https://whitepapers.theregister.com/
The Department for Science, Innovation and Technology (DSIT) outlined the move in a [1]package of policy reforms published on November 14, offering targeted pricing support for datacenters in designated AI Growth Zones.
Included are discounts of up to £24 per MWh in Scotland, up to £16 per MWh in Cumbria, and up to £14 per MWh in the North East. This is intended to boost the construction of more datacenters amid politicians' obsession with AI fueling economic recovery.
[2]
These regions were selected to ease grid pressure, we're told. Scotland's wind generation, for example, often exceeds transmission capacity.
[3]
[4]
"There are sometimes mismatches between the amount of electricity generated in a certain region and the electricity grid's ability to transmit that electricity from that region to another," the document explains.
"When datacenters locate in Scotland and the north of England, they can harness this generation, and reduce the overall cost of our electricity system."
[5]
The current thinking is it will also help rebalance investment across the UK, encouraging growth in regions with available clean energy.
The scheme will impose no additional cost on other electricity billpayers, the document claims, however, if discounts were to be covered by the government, that would still equate to ordinary people subsidizing energy bills for datacenters via their taxes.
We asked DSIT for comment, but it declined to give us an official statement.
[6]
American consumers already [7]face rising electricity bills as AI datacenter demand [8]strains regional grids , leading to higher wholesale prices. The UK could follow the same trajectory unless new energy supply matches the increased load.
The British government faces a dilemma: solar and wind are variable, [9]nuclear takes years to build , and gas plants contradict carbon reduction commitments. Yet the government has approved more gas capacity, and higher distribution network charges are already hitting consumer bills.
Despite recognizing the scale of the challenge, [10]officials lack a coherent plan to supply the massive energy requirements these datacenters demand.
The government's [11]AI Opportunities Action Plan , announced at the start of this year, is designed to accelerate AI datacenter build-outs by "streamlining" planning approvals and speeding power provisioning.
DSIT's policy paper says government needs to go further than the Planning and Infrastructure Bill now passing through Parliament. This includes updating national pllicy guidance to give "significant weight" to AI Growth Zones, creating a dedicated team of datacenter planning experts to advise local authorities, and fast-track approval for large projects as Nationally Significant Infrastructure Projects.
As The Register [12]reported last year, those planning reforms often mean removing the right of residents to object to any application to build massive server farms in their area.
[13]Britain's first small modular reactors to be built in Wales
[14]Equinix revealed as occupant of £3.9B UK datacenter campus
[15]Britain's AI gold rush hits a wall – not enough electricity
[16]Microsoft pens $15B love letter to the UK with 23,000 Nvidia GPUs attached
To speed connections to electricity supply, the government aims to remove speculative demand in the grid connections queue. These are requests related to building projects that never got off the ground but weren't cancelled.
[17]400 GW of outstanding requests for connection to the power grid around London alone was estimated by real estate biz Cushman & Wakefield in February, and energy regulator Ofgem said 60-70 percent of these were so-called "zombie projects."
This isn't just a local issue – the US Energy Secretary [18]recently ordered measures to speed grid connections and deter speculative projects.
UK government also wants to reserve future capacity for AI Growth Zones, and work with Ofgem to allow developers to build and connect their own high-voltage transmission lines and substations, rather than waiting for the energy companies to do it. This move was [19]advised by energy management biz Schneider Electric.
Datacenters within AI Growth Zones will qualify for a special Connections Accelerator Service offering "enhanced engineering support" with a view toward finding "creative solutions to connection delays."
A dedicated AI Growth Zone Delivery Unit within DSIT will "act as a single point of contact for investors and developers interested in partnering on delivering AI Growth Zones." This is to identify suitable sites and investors for a project, and ensure each designated AI Growth Zone is delivered on time and in scope, the paper says, with the service set to formally launch in January.
One question the policy paper fails to address is whether Brits will accept subsidizing datacenters while their own energy costs remain among the highest globally. The Reg suspects it knows the answer. ®
Get our [20]Tech Resources
[1] https://www.gov.uk/government/publications/delivering-ai-growth-zones
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aRxR0qnkjdKtgQOODnRzAgAAAUk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.bloomberg.com/graphics/2025-ai-data-centers-electricity-prices/
[8] https://www.cnbc.com/2025/11/14/data-centers-are-concentrated-in-these-states-heres-whats-happening-to-electricity-prices-.html
[9] https://www.theregister.com/2025/11/13/anglesey_smr/
[10] https://www.theregister.com/2025/10/17/in_britain_talk_is_cheap/
[11] https://www.theregister.com/2025/01/13/uk_government_ai_plans/
[12] https://www.theregister.com/2024/09/17/objections_to_datacenter_builds_cni/
[13] https://www.theregister.com/2025/11/13/anglesey_smr/
[14] https://www.theregister.com/2025/10/30/equinix_datacenter_hertfordshire/
[15] https://www.theregister.com/2025/10/17/in_britain_talk_is_cheap/
[16] https://www.theregister.com/2025/09/17/microsoft_uk_ai_cash/
[17] https://www.theregister.com/2025/02/10/london_has_400_gw_of/
[18] https://www.theregister.com/2025/10/24/doe_datacenter_grid_connection/
[19] https://www.theregister.com/2024/10/25/schneider_exec_dc_power/
[20] https://whitepapers.theregister.com/