In our previous article on the rise of AI-driven data centres, we explored how the UK’s AI revolution is triggering an unprecedented digital infrastructure boom. In that article we estimated that data centre floor space is projected to grow fourfold from 2024 levels to 2030 presenting a significant opportunity for investors in the digital infrastructure space. AI is now driving the next major investment wave in high-performance computing environments.
This expansion is underpinned by the UK Government’s AI Opportunities Action Plan, which sets out a 50-point strategy to cement the UK’s leadership in AI to fast-track planning for AI data centres, expanding compute capacity to support world-leading AI research, to drive efficiency and innovation within public and private sectors.
In this article (the second of three in this AI series) we explore the opportunities that the Plan presents to local authorities in terms of economic growth, investment, and regeneration.
AI-driven expansion raises critical planning, energy, and sustainability challenges
Councils that prepare for this expansion early will benefit the most; however the scale of AI-driven expansion also raises critical planning, energy, and sustainability challenges. To ensure they are positioned to benefit from AI infrastructure investment, councils must proactively address three key policy areas highlighted below.
Local authorities should get on the front foot now to future proof their digital infrastructure and take control of AI growth as demonstrated in our three-point AI infrastructure plan for local authorities.
Planning & Site Allocation: Where Will These Data Centres Go?
Unlike traditional commercial developments, AI-ready data centres have unique site requirements:
Large-scale, high-connectivity sites with robust power and network infrastructure.
Proximity to renewable energy sources to meet sustainability commitments.
Integration with local economic development plans to support job creation.
Our discussions with local authorities and industry stakeholders highlight that without proactive site allocation, councils risk either missing out on investment or struggling to manage unplanned developments.
To avoid missing out on investment local authorities should:
Identify AI-ready sites—identifying sites, focusing on disused industrial, manufacturing, and heavy industry sites or new sites planned for significant investment.
Leverage AI Growth Zones—to streamline planning approvals for data centre investors.
Integrate AI infrastructure into regeneration strategies—ensuring it complements local economic development priorities.
Energy & Grid Capacity: Can the UK Keep Up?
AI workloads consume significantly more electricity than traditional computing applications. Data centres that support AI require:
4–5 times the power of conventional IT facilities with some hyperscale facilities estimated to consume over 100 MW per facility.
Continuous uptime, putting pressure on grid resilience.
Advanced cooling systems, increasing water and energy demands.
Without grid reinforcement and sustainable energy solutions, rapid AI infrastructure expansion could lead to local energy shortages. To ensure local authorities have the necessary supporting infrastructure in place, local authorities should:
Engage with National Grid and energy providers to assess local grid capacity to support.
Encourage AI data centres to integrate on-site renewable energy solutions including solar, wind, and battery storage where feasible.
Explore district energy networks that reuse waste heat from data centres for local heating.
Some councils have already started working with energy providers to prepare for AI-related growth—those who act now will be best positioned to attract responsible, sustainable investment.
Sustainability & Community Benefit: AI Must Align with Net Zero
With AI data centres expanding rapidly, local authorities must ensure sustainability commitments are built into planning approvals.
Mandating low-carbon cooling technologies—reducing reliance on water-intensive cooling systems.
Encourage Circular Economy Integration—AI data centres can support local industries by integrating with adjacent manufacturing or agricultural processes.
Embedding community benefit agreements—ensuring local residents and businesses gain from AI investment.
To help local authorities commit to sustainability commitments they should:
Set sustainability conditions in planning approvals—including carbon reduction targets.
Work with industry partners to develop AI infrastructure impact assessments—similar to environmental planning policies.
Ensure AI investment benefits local communities—by requiring data centre operators to contribute to local economic development funds.
The AI Data Centre Boom is Here: A Pivotal Moment for Local Authorities
The UK Government is committed to expanding AI infrastructure, but local authorities must take proactive steps to prepare for this digital transformation.
Local authorities that prepare early will benefit the most. By aligning planning policies, energy strategies, and sustainability commitments, local authorities can ensure AI infrastructure delivers long-term economic and environmental benefits.
Want to explore how your local authority can prepare for AI investment and digital infrastructure expansion? Contact our expert team at: info@intelligensconsulting.com or visit www.intelligensconsulting.com to discuss how we can help you develop a future-ready AI and data centre strategy.
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