A prominent UK property developer has highlighted an urgent challenge in expanding data center infrastructure: securing adequate power supply. David Sleath, CEO of Segro, expressed in an interview with The Times that their commitment to investing substantial amounts in new data centers is hindered by power grid connection delays.

According to Sleath, the primary bottleneck in advancing these projects is gaining access to sufficient electricity. This issue, while longstanding, is increasingly problematic as it obstructs investment into critical sectors that are pivotal for the UK’s economic strategy.

Segro confronts extended delays, sometimes several years, awaiting enhancements to local substations to boost grid capacity. Their current market valuation stands at over £11 billion ($14.2 billion), traded on both the London Stock Exchange and Euronext Paris.

Power scarcity is not confined to the UK; globally, similar concerns plague data center operations across major regions including North America, Europe, Latin America, and Asia-Pacific, as detailed in a CBRE report from July. This has led some governments to streamline permit processes and integrate more renewable energy solutions to mitigate grid limitations.

In the US, management consultancy Bain & Company has cautioned that utility firms are unprepared for the massive surge in data center demand, exacerbated by the growth of AI and cloud services. There’s a looming risk that energy needs could soon outpace supply, emphasizing the need for quick capacity expansion.

The drive to develop AI models and cloud services is propelling this data center boom. Recognizing their importance, the UK government has recently classified data centers as critical national infrastructure, aligning them with essential services like water and electricity.

As previously covered, this policy adjustment may facilitate easier planning approvals for new sites, overcoming local opposition. The UK’s Department for Science, Innovation & Technology confirmed commitments from four US tech giants to invest in local data facilities, enhancing infrastructure required for AI advancements.

Nevertheless, long delays in power connectivity might redirect investments elsewhere, as per The Times’ report. The UK National Grid has stated its commitment to swiftly linking viable projects to the grid, with governmental collaboration aimed at reforming outdated procedures to hasten network upgrades.

Despite potential opposition due to limited local benefits and possible environmental impacts, the data center industry’s growth trajectory is undeniable. A recent study predicts significant increases in global emissions associated with data center operations, tripling potential impacts without the development of generative AI.