As demand for AI and high-density computing accelerates, the UK faces a pivotal moment: can its energy system keep pace with the data centre economy?

Published: 2 February 2026
Author: Chris Pritchett

At our recent Clean Currents: Energising Tomorrow’s Data Centres event, leaders from energy, data, policy and investment explored how grid reform, storage innovation and bold planning decisions will shape the next decade. Their message was clear: resilience will rely on faster connections, cleaner power and smarter collaboration.

Panel 1: Today’s market pulse – trends and realities

Panellists:

• Chris Pritchett, E&I Sector Co-Lead & Partner, Shoosmiths (Moderator)
• Liam Phillips, Data Centre Lead & Partner, Shoosmiths
• Katie Davies, Head of Energy and Infrastructure Policy, techUK
• Mikey Clark, CEO, Relode
• Giles Hanglin, CEO, Apatura Energy

Grid connection challenges and AI growth zones

Mounting pressure on the UK grid is slowing progress. Connection requests are piling up, driven by decentralisation and a surge of applications linked to new AI growth zones. While these zones aim to accelerate nationally important projects, panellists warned they risk creating a two‑tier system where some developments jump the queue.

Questions also surfaced around whether current incentives are strong enough to attract large‑scale AI training environments – especially against global competition. Panellists cautioned that fast‑tracking specific technologies could unintentionally distort the market.

Yet there was clear optimism for Scotland. Its strong wind generation and expanding storage capacity position it as a genuine contender for the next phase of data centre growth, offering the mix of renewables and grid flexibility the UK now needs.

Energy costs, levy reform and the role of corporate PPAs

Rising price pressures faced by UK operators was raised as a key issue facing the sector, among the highest in the IEA, driven by policy levies and network charges. Key considerations include:

• call for levy reform: TechUK is actively lobbying for structural change, advocating for a shift of policy costs from energy bills to general taxation to improve affordability for industry and households alike.
• corporate PPAs: value but limitations: While power purchase agreements (PPAs) help secure renewable supply and price certainty, they do not always guarantee cheaper power, particularly where market rules or contracts for difference (CfD) arrangements influence outcomes. Smaller operators may find the market especially challenging to access.

Unlocking the next era of grid flexibility

The panel showcased how a new wave of smarter, faster connection models is reshaping the energy system. Battery‑integrated connections are already cutting through traditional bottlenecks by ramping in seconds, smoothing demand spikes, and soaking up excess wind generation that would otherwise go to waste. The result? A steadier, more resilient grid that’s built to handle volatility.

At the same time, private wire and grid‑park models are evolving fast. Backed by updated legislation, they’re enabling clusters of high‑demand users to share local access to renewable power and storage. This is shortening connection timelines and reducing costs for organisations that can’t afford to wait years to electrify.

But the real step‑change is what comes next. The sector is shifting decisively towards long‑duration storage, with 6-8‑hour batteries and next‑generation technologies beginning to scale. These solutions will boost reliability, unlock greater flexibility, and drive down long‑term energy costs.

Together, these innovations point to an energy system that’s more flexible, more resilient and genuinely future‑ready.

Panel 2: Future focus – building resilient and green infrastructure

Panellists:

• Grace Kendrick, Associate, Shoosmiths (Moderator)
• Max Finney, Senior Sustainability Manager, Shoosmiths
• Philipp Lukas, CEO, Future Biogas
• Alex Doobay, Group Director (Investment), Global Switch
• Clare Horgan, Development Director, Relode

Shaping smarter infrastructure policy

Bringing data centres into the Nationally Significant Infrastructure Projects regime could speed decisions, but only if industry voices help shape the framework.

There is also rising pressure on sustainability disclosures. With tighter Corporate Sustainability Reporting Directive (CSRD) and International Financial Reporting Standards (IFRS) requirements, the cost of getting reporting wrong – both financial and reputational – is now significant.

Looking ahead, the panel called for more coordinated policy, stressing the need for early, active industry engagement, especially as major storage and interconnection projects may depend on direct Government support.

The next leap in data centres: Cleaner, smarter, more resilient

Emerging technologies are accelerating data‑centre decarbonisation. Liquid and immersion cooling, combined with AI‑driven optimisation, are already cutting power and water use. Nuclear options, including small modular reactors, offer long‑term stability, though cost and planning hurdles remain. Biomethane provides an immediate, practical route to lower emissions through the existing gas grid.

Alongside this, transparent water management and meaningful community engagement are essential to maintaining a strong social licence to operate. Together, these developments show a sector moving towards a more resilient, low‑carbon future.

Why the future of energy needs faster, smarter partnerships

Early, cross‑sector collaboration is proving essential to faster, more resilient infrastructure delivery. Bringing operators into the design and planning process earlier helps avoid grid constraints and supports smarter site selection. Financing models are also shifting, with hyperscalers increasingly taking direct stakes in energy assets — from nuclear to long‑duration storage — rather than relying solely on long‑term PPAs.

But market gaps remain. Areas like tidal energy and bulk storage may need targeted Government investment to unlock progress. The direction is clear: early engagement, innovative capital, and focused public support will drive the next wave of energy infrastructure.

What the sector must prioritise next

Clear calls to action are emerging across the sector. System‑level reform of electricity pricing and levy structures is urgent, along with practical, evidence‑led feedback on planning and grid reform to ensure proposals work in real‑world deployment. There’s also a growing push for operators and developers to work earlier and more strategically to identify the right regions for data‑centre growth and accelerate delivery.

Market gaps persist. Tidal, hydro storage, bulk renewables and nuclear will need targeted Government investment to move at pace. And sustainability must shift from an add‑on to a baseline, driving innovation in storage, grid design, cooling and alternative fuels to build long‑term resilience.

Closing reflection

As the UK faces accelerating digital demand and unprecedented pressure on its energy networks, the intersection of these sectors is becoming one of the most strategically important areas for national competitiveness. The discussions at our event offered a rare blend of real time market intelligence and forward-looking vision, equipping organisations across the ecosystem with ideas, warnings and opportunities to shape the next decade of energy enabled data centres.