UK data centres are a step closer to being brought within the Nationally Significant Infrastructure Projects (NSIP) regime, after receiving backing from both Houses of Parliament. 

The addition of data centres to the NSIP regime came as part of an amendment to the Infrastructure Planning (Business or Commercial Projects) Regulations, allowing it to simply add ‘data centres’ as a use case, rather than bringing a whole new Act into parliament. The amendment has now successfully been cleared by MPs in the House of Commons, which approved it earlier in November, and by the House of Lords last week. 

That doesn’t mean data centres will fall under the NSIP regime immediately, however. It still needs to gain formal approval from Home Secretary Shabana Mahmood before it can go into place. Once that’s done, however, data centre developers will have a right to request that their project is treated as an NSIP for consenting purposes.

What is the Nationally Significant Infrastructure Projects (NSIP) regime? 

The NSIP regime, introduced in 2008, was originally designed for nationally significant energy, transport, water, waste water and waste schemes. In 2013 it was opened up to certain business and commercial projects and, in December 2024, the UK Government confirmed that it would extend eligibility to include data centres, gigafactories and laboratories.

The move forms part of a wider push to stimulate investment in digital infrastructure to support the growth of AI, which this Government sees as a key driver of economic growth. Alongside bringing data centres within the NSIP framework, the Government has also set out broader plans to streamline consenting for nationally significant projects.

In a recent policy paper on delivering so-called AI growth zones, the Government said it is exploring whether it can cut NSIP consenting times from an average of around 18 months down to 12. It added that it will “consider further planning reforms that may be needed to streamline the delivery of AI growth zones” too.

Will this make it easier to build new data centres? 

By falling under the NSIP regime, data centre developers should be able to avoid the standard Town and Country Planning (TCPA) route. That’s because it uses a Development Consent Order (DSO), which can wrap together planning permission, compulsory acquisition powers, as well as certain highways, street works and ancillary consents. It also takes into account the national picture, rather than just focusing on how the local council reacts to the proposed development. 

While this all in theory will make it easier to build new data centres, the House of Lords Secondary Legislation Scrutiny Committee highlighted one concern that is still outstanding – the fact that the proposed national policy statement for data centres, which will ultimately guide decisions on data centre NSIPs – has yet to be published. 

Baroness Taylor of Stevenage, Parliamentary Under-Secretary of State at the Ministry of Housing, Communities and Local Government, has confirmed that ministers intend to publish a draft NPS for data centres shortly after the regulations come into force. She said the document, which is “currently under development and testing”, will set out “details of any thresholds and parameters, such as size or other relevant factors [to clarify what projects are in-scope of the policy], as well as relevant policy background – including the needs case for data centres.”

Baroness Taylor also stressed that environmental sustainability will be central to the new policy, addressing questions from Baroness Pinnock and Conservative peer Lord Jamieson over data centres’ demand for water and energy.

Peers also used the debate on the amendment to probe whether future policy will require data centres to capture and reuse waste heat to serve nearby homes or public buildings.

Baroness Taylor confirmed that current Government policy is to ‘encourage’ developers and operators to recycle excess heat into local networks, but did not rule out tighter obligations.

Will data centre developers choose the NSIP route?

While the regulations open up the NSIP regime to data centres, industry experts do not expect a flood of schemes to switch from local planning authorities to the national route.

The Government’s own AI growth zones paper appears to take a similar view. It states that ‘planning for most AI data centres will be consented through the standard local planning process (Town and Country Planning Act)’ and that it expects only ‘a small number of very large projects may need to go through the Nationally Significant Infrastructure Projects (NSIPs) consenting route’.