Data centres could be built on parts of London’s green belt for the first time under proposals published by Mayor of London Sadiq Khan.

That’s according to the first draft of the new London Plan, which is now subject to a three-month consultation period, but could, if implemented, allow data centre development on land classed as ‘grey belt’. 

While the green belt encircling London has been protected from widespread development since the Second World War, it’s not exactly full of meadow fields as the term would suggest. That’s because some of the green belt can actually be further classified as ‘grey belt’, which is land that is considered lower quality, previously developed, or of limited environmental value.

It is this land that could be opened up to data centre operators as London attempts to accommodate the infrastructure needed to support artificial intelligence, cloud computing and other digital services.

It also comes at a key time for the capital, which is hoping to retain its place as Europe’s leading centre for AI development and the continent’s biggest data centre hub. Its attempt to do just that comes at a time when London is increasingly constrained in terms of land, power and even skills. 

That’s why opening the grey belt could help with at least one of those challenges – although the London Plan does note that the facilities would still need to meet requirements covering electricity demand, water consumption, cooling and the use of waste heat. So, it’s not like it’s simply opening the floodgates to unrestricted development. 

Data centres given greater planning flexibility

Development within the green belt has traditionally been heavily restricted, with exceptions generally focused on housing in locations with suitable transport connections.

Under the draft London Plan, however, data centres are described as the ‘only exception’ to that approach.

The justification is that data centres generate less traffic and day-to-day activity than many other commercial developments once operational. Facilities can occupy large sites, but typically require fewer employees and deliveries than factories or warehouses.

That distinction has prompted questions over whether data centres are being given preferential treatment compared with other industries looking for space in and around the capital.

Giles Pink, a Partner at Bryan Cave Leighton Paisner, told The Telegraph the proposed policy was “quite permissive”, noting that data centres now “have a bit more privilege in this emerging policy” compared with other sectors.

That will be welcome news to developers who are still eager to build their data centres in the London area but are increasingly constrained by land availability. The opening of the grey belt won’t necessarily solve the power issue, however. 

Power remains the bigger challenge

The grey belt proposal follows an announcement made by Khan in June, when he set out an ambition for London to become a global leader in sustainable data centre development.

A report commissioned by City Hall found that London already had 99 data centre sites drawing around 760 MW at peak demand, which it compared to the electricity consumption of approximately 750,000 homes. 

While that comparison often stokes up concern amongst communities around London, the bigger issue is the queue of projects waiting for a grid connection – which is estimated to be around 10 times that currently used by existing facilities. 

As we’ve previously covered, being in the queue doesn’t necessarily mean that those facilities are going to be built, but the sheer amount of capacity requested in the capital does showcase the continued popularity of London as a data centre hub. 

That’s why Khan pledged to bring together London boroughs, energy providers, developers, universities and technology companies to coordinate future growth. The wider strategy is intended to ensure data centres do not secure electricity capacity at the expense of housing, transport or London’s decarbonisation plans.

Speaking at the time, Sadiq Khan acknowledged that energy planning would be central to any expansion of the sector.

“My ambition is clear, I want London to become the world’s leading city for environmentally-friendly, low-emission, high-efficiency data centre development, and AI infrastructure so that our capital remains a leading global hub for digital innovation,” he said.

“The energy requirements of data centres are colossal, so delivering their expansion at pace alongside London’s other infrastructure needs will require more coordinated planning.”

City Hall has also suggested London could become a testbed for technologies including more efficient cooling, on-site generation and heat reuse. The OPEN heat network at Old Oak and Park Royal, for example, is expected to use waste heat from data centres to supply low-carbon heat to nearby homes and businesses.

Those concerns have also been raised by the London Assembly Planning and Regeneration Committee, which scrutinises the Mayor’s spatial development strategy.

“The provision of electricity is critical and will only become more so in the years ahead. As a result of this reliance, when the grid can’t keep pace with demand, the consequences are immediate,” James Small-Edwards, Chair of the Committee, said back in December 2025.

“The government wants the UK to lead the way globally in artificial intelligence and digital innovation. Bold goals that, if successful, will drive huge demand for data centres, which are often staggeringly energy-intensive.

“But if we don’t plan ahead, we run the risk of not meeting those ambitions, or realising those ambitions at the expense of urgently needed housing and infrastructure.”

Some newly proposed facilities have already managed to secure permission, with CyrusOne recently getting the nod from Ealing Council after it promised that its new data centre in Southall would not draw from existing local grid capacity. That is being built on a brownfield site, however. The new restrictions for building on the grey belt are set to be even stricter. 

Under the draft Plan, proposals for new data centres would need to demonstrate:

• Coordinated heat recovery infrastructure informed by a waste heat utilisation plan
• Coordinated electricity and water efficiency measures, including innovative cooling technologies
• On-site or nearby renewable electricity generation where feasible

These requirements could make it more difficult and expensive to secure planning permission, but they also reflect growing pressure on data centre developers to demonstrate that new facilities will not simply add to London’s existing infrastructure constraints.

Green belt concerns remain

Even with tighter sustainability requirements, the prospect of allowing large developments on protected land is likely to face opposition from environmental groups, local communities and politicians.

Andrew Rosindell, the MP for Romford, warned that the proposals risk “setting a dangerous precedent by making it easier to build large-scale data centres on green belt land.”

He stressed that he was not “opposed to data centres given their rapidly growing importance,” but argued that expansion “should not come at the expense of the countryside that local communities value.”

London may also want to take note of what is happening in Scotland, where political enthusiasm for green data centres has begun to collide with concerns over energy use and environmental impact.

The Scottish Government had previously sought to position the country as a hub for green data centres, largely because of its substantial renewable energy resources. However, the SNP has now joined calls for a temporary moratorium on AI data centre development, while the Scottish Government reviews measures that could include a pause on applications.

That change in direction follows community opposition to proposed developments, as well as concerns from politicians and local authorities over whether Scotland has a clear definition of a green data centre and enough national guidance to assess major projects.

It demonstrates the difficult balance facing London. Political leaders may want to attract the investment, jobs and digital infrastructure promised by AI, but public support could quickly weaken if projects are perceived to threaten protected land, electricity supplies or climate targets.

The consultation will now determine whether the policy survives into the final London Plan and how narrowly the grey belt exception will be applied.

It’s clear that London will need more digital infrastructure if it hopes to capitalise on the growth of AI. The harder question is whether the capital can find enough suitable land and electricity without delaying housing, placing further pressure on the grid or weakening long-standing protections for the green belt.