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Housing shortages in London and the South East have long been one of the most prolific problems facing the government.
Yet desperately needed new supply is unlikely to materialize soon in west London, after developers were told last week they could be prevented from starting new projects in the area until 2035 because the electricity grid has run out of capacity.
But it is not just the tightening of energy supplies amid the war in Ukraine that is behind the de facto ban – the growing demand for data centers is draining the UK’s power grid.
These warehouse-sized buildings full of computer servers absorb so much electricity that the Greater London Authority (GLA) has told housebuilders it could be more than a decade before new developments in Hillingdon, Ealing and Hounslow can be sustained by the grid.
Much of the problem boils down to the financial success of the M4’s “Silicon Corridor”. As technology and financial companies compete for office space near the data centers that run their businesses, demand inevitably creates greater supply.
Around half of the UK’s estimated 200 data centers are in the south east of England, with a large proportion concentrated in the area between Reading and Ealing.
SSE, the electricity distribution network operator covering west London and Slough, estimates that a typical data center campus needs 50 megavolt amps (MvA), which is the electrical demand required by developments of 5,000 to 10,000 homes.
With around a dozen planning applications for new data centers pending across the area, the huge power needs of these data centers should be considered.
In Ealing, for example, there are currently seven applications to build new data centers before planning inspectors.
A memo sent to housebuilders by the GLA this month, seen by The Telegraph, said data center planning applications blocked new housing developments until 2035.
It said: “Over the past two years, the distribution network operator, SSEN, has experienced the same volume of new data center connection requests in west London as the total electricity demand in the area.”
Jump into remote work
According to sources, the authorities have largely used a first-come, first-served system for allocation of electricity demand. But a jump in telecommuting since the pandemic has helped increase demand for computing and connectivity – and the electricity to service it – meaning the current system is no longer fit for purpose.
A spokesman for the Energy Networks Association described the problems in West London as an “isolated circumstance caused by a rapid and concentrated expansion of demand from a local growth in data centers, far higher than forecast.”
Nevertheless, the power supply problems are not limited to the three districts highlighted by the GLA. They extend further west into the Thames valley, extending as far as Reading.
Tech companies such as Oracle, Microsoft, Dell and Huawei all have bases here, in part because of nearby transatlantic data cables that feed London. These mostly follow the M4, and businesses along their route are keen to make use of these trade channels – so that they suck up the power grid.
International Energy Agency (IEA) estimates say data centers account for around 1pc of global electricity consumption, at between 200-250 terawatt-hours, with demand increasing “exponentially”.
Inextricably linked to the data center’s power consumption is power consumed by data transmission networks, fiber optic nerves and arteries in today’s digital economy. While the IEA says the energy intensity from these networks has halved every two years since the millennium, they still account for up to 1.4 percent of global electricity demand.
This means that in areas such as west London, data centers drink electricity – and their insatiable thirst creates drought in the surrounding area.
One six-foot-tall rack in a data center holds up to 42 servers, and uses about six to eight kilowatts (kW) of power. A typical data center can contain a few thousand racks, meaning that a building the size of an industrial estate can contain between 500,000 and 1 million servers depending on the internal layout.
Reduce energy demand
Powering the servers is only part of the data center’s electrical equation. Intensive calculations required for artificial intelligence (AI) or enterprise IT work generate heat.
Cooling fans must be installed to remove that heat, and with such a large number of servers in such a small space, data centers need large and powerful industrial air conditioners to prevent a literal meltdown. About 40pc of a typical data center’s electricity consumption is used to run the air conditioning.
With these figures in mind, it is easy to understand how data centers such as data center operator Virtus’ London-2 facility in Hayes, Hillingdon, need to draw up to 12.2 megawatts (MW) from the National Grid.
Slough, on the border of Hounslow and Hillingdon, is home to half a dozen such public data centres, as well as a number of single-user sites run by major technology companies. Nearby Heathrow Airport has at least two public data centers and a significant number of private ones nearby, serving airlines and the travel industry. British Airways has two data centers near Heathrow, which run the airline’s operations and provide backup in case of failure.
Measures are underway to reduce the power requirements for data centres.
Craig Melson, industry body TechUK’s assistant director of sustainability, said the industry was working on initiatives such as the Open Compute Project, a Facebook-led scheme to redesign servers to use less energy.
Meanwhile, Business Secretary Kwasi Kwarteng has promised a partial solution by next year, saying energy regulator Ofgem “has decided to change the connection charging framework, from April 2023, which will see connection costs fall for housing developers who require [electricity] network reinforcement to accommodate their connections.”
Ultimately, the answer lies in power generation and distribution capacity, combined with political pragmatism that allows smaller new housing developments to skip data center construction and fit-out cycles.
While data centers may be essential to modern business and technology-dependent lifestyles, their huge electrical demands add another hurdle to solving Britain’s housing crisis.
