A strong pipeline of data centres with planning permission is getting ready to start on site in the next year to support the growth in artificial intelligence (AI).
Glenigan’s construction industry research has identified 434 projects comprising data centres or IT processing facilities at various stages of development in the United Kingdom
The UK data centre market is estimated to be 2.19 thousand MW in 2024 and to grow to 3.61 thousand MW by 2029 according to data from Mordor Intelligence.
The largest scheme in the pipeline is an estimated £8 billion proposal from Amazon Web Services to build a string of data centres across the UK (Project ID: 24262128).
Glenigan’s market intelligence has identified a total of 286 other project in the UK that comprise data centres or IT processing facilities and have planning permission.
Out of that approved total, 53 schemes are due to start on site over the next 12 months according to Glenigan’s research.
Economics director Allan Wilén says: “Developers possess a substantial pipeline of approved projects ready for construction. London boasts a particularly robust development pipeline, followed by the South East.”
In its 2024 Global Data Center Investor Intentions Survey, CBRE predicted that demand would outstrip supply in Europe, where London is the leading provider of data centres of the four major international cities that comprise what is known in the industry as the FLAP (Frankfurt, London, Amsterdam, Paris).
London also has the biggest pipeline of UK schemes providing data centres and IT processing facilities according to Glenigan’s research, which has identified 96 projects and 66 have detailed planning approval. Seven are due to begin construction over the next year, including Global Switch’s £152.1 million London South development in Tower Hamlets (Project ID: 21230357)
Outside of London, the South East has the next largest pipeline with plans for 75 data centre-related projects.
Two-thirds of these proposals have planning permission and 10 are expected to start construction over the next year according to Glenigan’s industry analysis.
Plans due on site soon in the South East include Cloud HQ’s £308.3 million data centre on a site west of the Didcot B power station in Sutton Courtenay in Oxfordshire (pictured) (Project ID: 18203036).
Contractors have submitted bids for the main contract with three identified by Glenigan. Once an award has been confirmed, work could begin on site by the end of this year and should run for around two years.
Elsewhere in the South East, Equinix’s plans for the £80.1 million Wexham Road Data Centre Campus in Slough, Berkshire were granted detailed planning permission in August (Project ID: 24074398). A start is due next spring on the site of a former AkzoNobel factory.
There are also 30 data centre and IT processing schemes in the East of England. Out of this total, five are anticipated to commence construction over the forthcoming 12 months.
Capita Land secured planning permission in July for an £87 million data centre at Mundells in Welwyn Garden City (Project ID: 23255512). Work is expected to begin early next year.
With strong demand from investors, the construction industry looks set to benefit from a rise in data centre and IT processing work.
Surge ahead for energy infrastructure work
The growth in artificial intelligence is boosting the development of data centres and leading to a surge in energy infrastructure work.
Data centres require vast energy resources, and this is set to increase. At present, 3% of the world’s annual energy consumption, an estimated 416 TWh, is taken up by data centres.
This is forecast to increase to 10% by 2030 and solutions to meet this demand are generating work opportunities in the UK construction industry.
Glenigan economics director Allan Wilén says: “National Grid’s £24.8 billion investment program for the transmission network will accommodate new generating capacity and rising electricity demand.”
One of the biggest energy infrastructure schemes in the pipeline is a proposed £1.2 billion high voltage direct current marine and underground electric power transmission link from Lovedean near Portsmouth to Le Havre in France (Project ID: 11046608).
National Grid is working with Réseau de Transport d’Electricité and Eleclink on the AQUIND Interconnector, which will have 2 GW of capacity and meet about 5% of the UK’s energy needs by powering up to five million homes.
The Ministry of Defence is currently considering the security implications of the plans, which have popular support with a poll this summer by Savanta showing 69% of residents in the Portsmouth area are in favour.
Balfour Beatty and Prysmian have been lined up as main contractors according to Glenigan’s construction industry research, which has also identified several other key consultants and suppliers on the scheme.
National Grid is one of the UK construction industry’s biggest clients with awards totalling £1.6 billion in the 12 months to August 2024 according to Glenigan’s market intelligence.
This ranks National Grid in fifth position in Glenigan’s rankings of the industry’s Top 50 clients. National Grid is also working on a swathe of other energy schemes that are at various stages of the procurement pipeline.
Proposals for the £300 million Cross County Power Tunnel in Kent are still awaiting planning permission (Project ID: 24033221), but contractor J Murphy should start work before the end of this year on the £400 million Yorkshire GREEN plan Project ID: 21117882). This scheme will provide 7-km of new overhead lines plus a number of cable sealing end compounds, underground cables and two new sub stations near Overton and Monk Fryston.
SSE is also ranked among the industry’s top clients in the second spot after awarding £2.4 billion worth of work in the 12 months to August 2024 according to Glenigan’s construction industry research.
SSE also has several other major schemes in the pipeline. These include the £235.3 million Slough Multifuel Project, which will expand an existing multifuel combined heat and power electricity generating station from 50 megawatts of gross output to up to 60 MW (Project ID: 22068878).
Other major SSE developments include the £2.4 billion Coire Glas Hydro Scheme, which will be the UK’s first large-scale pumped storage project for more than 40 years and has a potential capacity of 1,500 MW (Project ID: 09209142). A 1.2-km exploratory tunnel was completed this summer, and the main works could begin next summer.
With the demand for energy set to increase through increased use of AI and more data centre development, the energy industry should be a major source of opportunities in the years ahead.
