Data Centres in the UK - Consumption, Costs, and the Future of Digital Infrastructure

31st December 2025

Data centres have become a cornerstone of the modern digital economy. They power everything from cloud storage and AI applications to streaming services and online commerce.

But while these facilities are vital for the UK's economy, they also come with significant resource demands, particularly electricity and water.

As the UK's digital infrastructure continues to expand, policymakers, industry stakeholders, and the public face crucial questions: should data centres pay more for the resources they consume, how large is their environmental footprint, and where is this sector heading in the coming years?

The Scale of Data Centre Consumption

Data centres are enormous consumers of electricity and, in some cases, water. A single large data centre can draw 20-50 megawatts of electricity continuously, which equates to hundreds of thousands of megawatt-hours per year. For context, a 30 MW data centre consumes approximately 262,800 MWh annually — roughly equivalent to the electricity use of a small town of 50,000 people.

Water use is also substantial in many facilities. Data centres that rely on water for cooling, particularly wet cooling systems, can use 3-5 million litres of water per day, adding up to 1–2 billion litres per year.

In comparison, a small town of 50,000 might consume 5–10 million litres per day, meaning a single data centre could consume 10–50% of the water a small town uses, just for cooling servers. These figures highlight the enormous footprint of these facilities and explain why their resource use is increasingly under scrutiny.

Should Data Centres Pay More for Electricity and Water?

There is a strong rationale for higher charges for large data centres, although it requires a nuanced approach.

1. Reflecting True Costs: Electricity and water rates often do not capture the full social, environmental, and infrastructure costs of very large consumption. Charging higher rates for super-consumers could encourage investment in energy-efficient technologies and renewable energy.

2. Equity Among Consumers: Households and small businesses generally pay a proportionate share of infrastructure costs. Very large data centres can place heavy strain on local energy grids and water systems while paying comparatively lower rates per unit of consumption, raising questions of fairness.

3. Incentivising Efficiency: Higher costs can drive data centres to adopt advanced energy-efficient servers, air-cooling systems, water recycling, and renewable electricity sources. For example, some operators have shifted to dry or hybrid cooling systems that drastically reduce water use.

4. Planning and Location Decisions: Higher rates could influence where new data centres are sited, discouraging development in regions where electricity or water supply is limited or under stress.

Counterarguments also exist: data centres contribute high-value jobs, attract global investment, and operate in a competitive international market.

Excessive charges could discourage investment in the UK, particularly for hyperscale AI or cloud computing facilities. A balanced approach — such as tiered pricing above consumption thresholds, combined with environmental incentives and transparency requirements — can encourage efficiency without discouraging economic development.

Current and Planned Data Centres in the UK

The UK currently hosts approximately 477 data centres, ranging from small local facilities to massive colocation hubs and hyperscale cloud campuses. This makes the UK one of the largest data centre markets in Western Europe.

Looking ahead, around 100 new data centres are planned over the next five years, representing almost a 20% increase in total facilities. These developments are largely driven by demand for AI processing, cloud services, and telecom expansion, with completion expected mostly by 2030, although some larger projects may extend into the early 2030s.

Regional Distribution of Planned Facilities

London & South East: Over half of planned data centres are located in this region, maintaining its dominance due to existing infrastructure and connectivity.

Wales: Approximately nine new centres are planned, expanding digital infrastructure beyond the main economic hubs.

Greater Manchester: About five centres are in development, strengthening Northern England’s digital capacity.

Scotland: Currently only one planned centre in Strathclyde, with additional large AI-focused proposals, such as a multi-billion-pound facility in Motherwell.

North East England: The largest planned project is a £10 billion AI and cloud computing data centre near Blyth, Northumberland.

This growth reflects the UK’s rising demand for digital services and shows how the sector is spreading geographically, including regions outside traditional hubs.

The Future Impact on Resources and Consumers

The anticipated growth in data centre capacity is expected to nearly double the UK’s electricity demand from these facilities by 2030, potentially exceeding 4 gigawatts of power. This expansion underscores the importance of considering energy and water charges, grid infrastructure, and sustainability measures.

While more data centres are essential for supporting AI, cloud computing, and other digital services, their massive consumption highlights the need for regulatory frameworks that balance economic growth with environmental responsibility. Measures like tiered pricing, mandatory efficiency standards, renewable integration, and water recycling are likely to become increasingly relevant.

Data centres are critical to the UK’s digital economy, but their resource demands are enormous. Large facilities can consume as much electricity as a small town and significant volumes of water, raising questions about fairness and sustainability.

Charging higher rates for electricity and water, while offering incentives for efficiency and renewable adoption, is a balanced approach to encourage responsible operations without discouraging investment.

With nearly 100 new centres planned and existing facilities already consuming vast resources, the UK faces a challenge: how to support the digital economy while protecting energy and water resources. Thoughtful policies and innovative technologies will be key to ensuring that growth in data centre capacity is both economically beneficial and environmentally sustainable.