Matt Cantwell, Director Product and Propositions at Colt Data Centre Services, argues that the UK must fix its power, planning and skills bottlenecks now if it wants to stay ahead in the global AI race.

With AI set to transform industries throughout 2025 and beyond, the demand for high-powered, scalable digital infrastructure has never been greater. Data centres sit at the core of this shift, enabling AI models to be trained, deployed, and scaled across different sectors. 

As the UK Government announces plans to ‘Turbocharge AI’, data centres must expand rapidly to meet soaring demands. According to our recent report with techUK, the UK’s data centre sector contributes £4.7 billion in GVA annually, supporting 43,500 jobs and generating £640 million in tax revenue. With the right policies in place, this impact could grow significantly, unlocking an additional £44 billion in Gross Value Added (GVA) and 40,200 new jobs by 2035.

However, despite the clear economic and technological benefits, several critical barriers – including power constraints, planning delays, and a widening technology skills gap – need to be addressed to ensure the UK remains competitive as a global leader in digital services.

Race to secure green energy

It’s important to address the fact that data centres are power-intensive facilities, especially with cloud and AI workloads requiring immense computational power, with demand expected to double by 2026. Yet, major obstacles remain in securing access to clean, affordable, and reliable energy for UK data centres. Grid connection delays are slowing down development, with some data centre projects seeing connection dates pushed back by more than a decade. Meanwhile, high electricity costs make UK-based data centres less competitive than those in other European markets.

These issues are compounded by the rapid acceleration of Generative AI adoption, which is placing even greater strain on energy resources. The International Energy Agency warns that global electricity use from data centres could exceed 1,000 TWh by 2026, which is equivalent to Japan’s entire annual energy consumption!

To overcome these challenges, significant investment is required to speed up access to grid infrastructure, accelerate the adoption of alternative energy sources, and improve overall efficiency. The industry has already made strides in securing renewable energy through Power Purchase Agreements (PPAs), which help stabilise pricing and contribute to the UK’s net zero targets. However, more needs to be done to ensure data centres are not constrained by energy shortages.

The adoption of gas turbines and geothermal energy solutions could provide short to medium-term stability while the UK is on its journey to full electrification. The sector has already made considerable progress in improving its Power Usage Effectiveness (PUE), but with AI’s energy footprint continuing to expand, further innovation will be essential to keep up with demand while maintaining sustainability goals.

Optimising the ecosystem

The UK is currently the largest data centre market in Europe, but international competition is rising, particularly from Northern and Eastern Europe. If the UK wants to maintain its competitive advantage, it must create an efficient, scalable, and resilient digital infrastructure ecosystem that can support and secure AI innovation while also providing economic benefits.

Local supply chains will play a crucial role in optimising the data centre ecosystem. Investing in UK-based construction, technology, and energy solutions will not only strengthen long-term resilience but also create more high-value jobs across those sectors. Additionally, repurposing brownfield and urban development sites as a priority could help ease land pressures while keeping data centres close to major AI hubs, reducing latency and improving overall efficiency.

Data centres drive regional growth. Beyond London, cities such as Manchester and Cardiff are emerging as key digital infrastructure hubs, attracting investment and creating high-paying jobs. Ensuring that these developments are supported through policy and further investment will be critical in maximising their economic impact.

Bridging the data centre skills gap

The data centre sector is facing a major skills shortage, which could threaten its ability to expand at the pace required to meet demand. Currently, 94% of data centre developers report difficulty in finding skilled talent, while 40% of the workforce is expected to retire within the next 15 years. Globally, the shortfall in digital infrastructure jobs is projected to reach 300,000 by 2025, making it one of the most pressing challenges for the industry.

To address this issue, significant investment in training and education is needed. The expansion of apprenticeships and education partnerships, such as the National Data Centres Academy, will be essential in training the next generation of specialists. Reforming the Apprenticeship Levy to allow funding for short, high-value digital training courses could help rapidly upskill workers and close the talent gap.

In addition, promoting diversity and inclusion within the industry is vital to futureproof digital infrastructure. The data centre workforce remains predominantly male and over the age of 45, meaning that targeted outreach, school career fairs, and government-backed STEM initiatives will be necessary to widen the talent pipeline. Investing in people is just as important as investing in technology, and without a skilled workforce, the UK risks falling behind the global AI race.

The UK’s data centre industry is at a pivotal juncture. As the digital economy continues to expand and Generative AI adoption accelerates, scalable, efficient, and sustainable digital infrastructure is crucial to maintaining the nation’s competitive edge. Addressing power constraints, focusing on expanding the supply chain ecosystem, and closing the skills gap will be essential in unlocking the sector’s full potential. 

With the right investment and regulatory support, data centres will continue to drive further economic growth, create high-value jobs, and cement the UK’s position as a key player in the global technology marketplace.