UK data centre land strategy: challenges, risks and opportunities

Whether it’s AI, cloud computing or more people streaming more Netflix, more digital activity means we’re going to need more data centres in the UK. Estimates suggest that capacity is due to rise between 3.3 GW and 6.3 GW by 2030. 

While this growth will bring huge benefits to the economy and the job market, the scale and pace of development required is significant. This pressure has only increased as data centres have been classified as critical national infrastructure. 

For developers to overcome these challenges, they need an effective land strategy that builds in planning practicalities and commercial considerations. 

• Land strategy challenges for data centres
  • Power availability
  • Land scarcity
  • Planning policy complexity and inconsistency
  • Site selection trade-offs
• How do the considerations change for different data centres?
  • Hyperscale
  • Colocation
  • Edge
• Are there any strategic solutions to these challenges? 
  • Adopting colocation designs
  • Derisking with NSIP
  • Geomatic-led site selection

Land strategy challenges for data centres

These challenges aren’t unique to data centres, as they’re also issues for other critical infrastructure such as wind farms and HS2. The specific issues also vary between the types of facility, but solutions need to be found to meet the UK’s digital infrastructure targets. 

Power availability

Currently consuming five terawatt hours annually, the National Energy System Operator (NESO) estimates data centres will require 22 terawatt hours a year by 2030. This could be the equivalent of 12% of the UK’s entire electricity demand. These predictions are also uncertain, as the rate of adoption of new digital technologies like AI isn’t reliably projected. 

What is certain is that data centres will consistently need reliable grid connection and capacity, meaning land is only viable where availability timelines are achievable. Outdated infrastructure, capacity bottlenecks and a backlog of grid connections are already causing problems, so the increased competition that data centres present is the primary development constraint. 

As electricity sources transition towards renewables in line with the UK government’s clean power strategy, questions over supply reliability only increase. 

Land scarcity

The footprint requirements for data centres run from one to more than 500 acres. With land supply already restricted, often the only option is for data centre developers to outprice other industrial developers. This is causing a significant inflation in industrial land values between £8m and £15m an acre, increasing the costs of acquisition as well as overall ownership. 

Planning policy complexity and inconsistency

In terms of planning policy, data centres fall between the industrial, infrastructure and sui generis classifications. This is because there are no land-use zones dedicated to data centres.

Plus, there’s limited explicit local policy support outside key growth areas, with few local planning authorities having the information they need to build data centres into their need-based spatial frameworks. This means developers are dealing with inconsistent planning policies and industrial uses to secure the right type of land.

Although data centre developments have been able to opt into the Nationally Significant Infrastructure Project (NSIP) regime since January 2026, there remains no clearly defined category or fixed threshold setting out which schemes qualify.

Currently, plans have to be considered and approved on a case-by-case basis, which brings a degree of uncertainty. This is due to change in a future National Policy Statement, but a date has not yet been set.

Beyond this, there are environmental considerations which may affect a planning application, such as:

• The use of resources, such as water for system cooling 
• Carbon footprint caused by the power capacity and reliability demands
• Ecological issues, including habitat destruction and chemical pollution risks
• Geographical risk zones such as flooding and heatwaves

Local community and authority objections may also affect data centre applications, whether determined under the Town and Country Planning Act or through the Development Consent Order (DCO) process. Concerns around increased noise and traffic, as well as impacts on the local landscape, can arise in both regimes and may complicate or delay the approval process.

Site selection trade-offs

Finding the correctly-sized, unconstrained site means there’s a constant tension and trade-off between requirements such as:

• Nearby proximity to reliable power connections
• Close vicinity to fibre connectivity to minimise data transit time and latency
• Planning acceptability, which can be more challenging with green belt and edge-of-settlement sites
• Sufficient space and features to maintain long-term operational resilience, such as secure infrastructure and cooling strategies
• Increased competition for suitable land, particularly in areas with strong existing infrastructure and connectivity, which can constrain site availability and drive up costs

Effectively balancing these competing considerations is critical to achieving capital efficiency and delivering a viable data centre development, making it both a complex and essential aspect of the project.

How do the considerations change for different data centres?

Each type of data centre has specific requirements which will impact on land strategy decisions. 

Hyperscale 

These data centres are designed to handle large-scale digital workloads and extreme scalability. 

To keep these facilities functioning effectively, huge power demands are required. As such, grid scarcity is the biggest issue for these types of data centres. To guarantee reliability, developers need to find large enough demand connections with backup points. The nearest substation also needs sufficient headroom to meet a large-scale demand connection. In response to ongoing grid constraints, some hyperscale developers are increasingly exploring on-site or localised microgrid solutions to supplement grid supply and enhance energy resilience.

Similarly, hyperscale sites need at least three different sources of fibre connection from different providers to ensure efficient data processing. This limits the flexibility of site selection. 

These requirements are balanced alongside the environmental considerations raised by the significant footprint and infrastructure required for hyperscale sites. The extensive land take can result in pressure on sensitive designations, such as Green Belt sites, while supporting infrastructure, particularly large-scale cooling systems, often rely on nearby water resources, raising additional environmental considerations

Colocation 

Colocation data centres are often strategically located to optimise access to existing infrastructure, including energy supply, while incorporating on-site backup solutions to ensure reliable long-term operations. These may include battery storage systems or standby generation, such as gas-powered facilities, to enhance resilience.

While this approach can reduce reliance on a single direct grid connection, colocation facilities must typically be located relatively close to their customers to provide low-latency services. This creates additional pressure on land availability in well-connected urban locations.

As a result, competition for suitable sites can drive significant land price inflation, particularly where locations offer strong fibre connectivity and access to supporting infrastructure. In addition, site selection and development can be constrained by planning considerations, including designated land uses and local policy restrictions.

Edge

Edge data centres are smaller, modular facilities typically deployed close to end users to support low-latency processing and localised data demands. For example, telecommunications operators may install containerised units adjacent to existing infrastructure such as masts or exchanges, providing sufficient capacity to meet specific operational requirements.

As with colocation facilities, edge data centres can contribute to increased pressure on land availability in well-connected locations close to end users. While this pressure may be somewhat reduced where operators can utilise existing landholdings or infrastructure, development is still likely to require planning consent and may be subject to local policy constraints, particularly in sensitive or constrained urban environments.

Are there any strategic solutions to these challenges? 

There is not a single solution to overcoming each data centre project’s land strategy challenges. However, there are some approaches which can be effective.

On-site power solutions

Increasingly, data centre developers are exploring alternatives to sole reliance on the electricity grid, including connections to the gas network and the integration of battery storage systems. Whereas developers have historically sought two independent points of connection to the grid to ensure full security of supply, there is now a shift towards more flexible and pragmatic approaches to energy resilience.

The incorporation of on-site energy storage and generation provides greater flexibility in site selection without materially increasing operational risk. This is particularly relevant during the transition to low-carbon energy systems. Battery storage enables excess energy to be retained and used during peak demand periods, while gas-based backup systems offer immediate resilience and may provide a pathway to lower-carbon alternatives over time, such as hydrogen blending or conversion.

Derisking with DCO

Since January 2026, data centre developments have been able to opt into the Development Consent Order (DCO) regime and seek classification as Nationally Significant Infrastructure Projects (NSIPs). While not appropriate for all schemes, this route can offer important advantages in managing development risk.

A DCO can help to derisk projects by:

• Enabling compulsory acquisition powers, allowing developers to assemble land and secure necessary rights for infrastructure such as cables 
• Centralising decision-making with the Secretary of State, rather than relying solely on local planning authorities, which can reduce local variability in outcomes
• Providing a single, unified consent, incorporating a range of associated permissions and licences, which can streamline the consenting process and improve certainty over programme, cost, and delivery

These benefits can broaden site selection options, enabling developers to consider locations further from existing power or fibre infrastructure where land may be less constrained and more cost-effective. At the same time, the greater level of certainty associated with a DCO can support investor confidence and improve the bankability of large-scale data centre projects.

Data-led site selection

Using our Geomatics software as part of the site selection process enables developers to make informed, evidence-based decisions. These tools bring together a wide range of land surveying and property data, allowing sites to be filtered and assessed against key criteria such as proximity to power and fibre infrastructure.

At Dalcour Maclaren, this capability is complemented by in-house expertise that not only captures high-quality data but also interprets it to inform strategic decision-making.

Once a shortlist of potential sites has been identified, Dalcour Maclaren’s specialists can assess planning constraints, land ownership, and other key factors. This provides developers with a comprehensive understanding of site viability, supporting the development of a robust land strategy.

This reflects the value of a multidisciplinary consultancy approach. With seamless integration between Lands, Environment & Planning, Geomatics and Stakeholder Engagement teams, all parties have access to a consistent and detailed evidence base from the outset. This joined-up approach ensures that constraints and opportunities are clearly understood early on, enabling the development of coordinated land strategies and supporting the efficient delivery of data centre projects at any scale.