Assembly report urges clearer planning as soaring AI power demands strain capital's network
Access to electricity has become a major source of delay for housebuilding in London, and datacenters are inevitably tied up in this, leading to calls for greater oversight of energy and construction planning so that they keep pace with demand.
A report published on Monday by the London Assembly, the elected body that holds the mayor and their administration to account, highlights the increasing pressure on the UK capital's electricity grid. It says that there is a need for better planning to address both IT infrastructure and new homes, especially as some areas are already overstretched.
It points to the grid reaching full capacity in some areas of West London back in 2022, contributing to delays on new housing developments. This is an area where there is a concentration of datacenters, which were blamed for the problems, as The Register reported at the time.
The Greater London Authority (GLA) worked with National Grid and regulator Ofgem to secure short-term fixes, and this enabled over 12,000 homes to be connected by early 2025, it says. But the capital's electricity requirements are expected to grow by between 200 and 600 percent in future, calling for long-term strategic planning to avoid further constraints or delays.
The matter has a degree of urgency because the UK, like other nations, is seeing a surge in datacenter construction thanks to the current AI development craze. The British government unveiled its AI Opportunities Action Plan at the start of this year, with measures designed to get more bit barns built, and many of these will inevitably pop up near London.
For example, Equinix is to build a large campus near London's M25 orbital motorway at South Mimms, while Google recently opened a facility near the M25 at Waltham Cross, and there are other projects at Abbots Langley, East Havering, and Woodlands Park, near Iver in Buckinghamshire, also near the M25.
The power required by AI-focused datacenters is growing, sometimes equivalent to tens of thousands of homes or even more. In the US, plans for 5 GW facilities are already in the pipeline, which would draw as much power as millions of homes.
The report, Gridlocked: how planning can ease London's electricity constraints, suggests a number of policy reforms to tackle the issue, including that the government should introduce a separate use class for datacenters, enabling their energy demands to be planned for in a clearer and more coordinated way.
Currently, such facilities are often laughably included in Use Class B8 (storage and distribution) because they are viewed as functioning like warehouses.
Other recommendations are that the GLA and London councils should have places on the London Regional Energy Strategic Plan board, and that all boroughs should complete a Local Area Energy Plan to inform requirements.
The GLA should also include a datacenter policy in its next London Plan to enable a more strategic approach to their development, and this should include energy demand assessments for large energy users such as bit barns.
"If there is to be just one takeaway from this investigation it must be this: grid capacity cannot be an afterthought," wrote James Small-Edwards, chair of the Planning and Regeneration Committee, in the report's foreword.
"We need a proactive, coordinated approach that ensures energy networks are anticipating heightened demand; that local plans integrate energy considerations; and that major energy users are managed strategically." ®