Data centre spending to quadruple by 2029 across UK
Author: Joe Peck
Spending on new data centres across Britain is set to reach an incredible £10 billion per year by 2029, according to new analysis by construction data experts Barbour ABI.
That is more than four times as much as the current £1.75 billion being spent per annum.
Atop this, the report states that, as investors seek cheaper land costs and cooler climates, the data centre drive will spread north – away from just London – and into Wales.
Nearly 100 data centres are currently in planning, with strong growth driven by demand from AI technologies and the internet of things (IoT).
The impact of this rapid growth
“With exponential growth of this kind, sustainability must be at the forefront of industry strategy if we are to avoid an environmental disaster,” notes Ed Griffiths, Head of Business and Client Analytics at Barbour ABI.
“Data centres are now recognised as Critical National Infrastructure (CNI). However, given the immense power they consume, operators will come under growing pressure to adopt greener practices.
“While many firms are pledging to use 100% renewable energy and implement energy-efficient technologies, there is currently no requirement to report energy usage publicly, so it will be difficult to hold them to account.”
As the need for data processing accelerates, the market is forecast to attract over £25 billion in inward investment over the next five years, according to Barbour’s latest data centre construction market report.
This surge in capital is reshaping the data centre construction landscape, with a rapid pipeline of new developments already underway.
Hyperscale facilities outside of urban areas
Growth is being supported by government initiatives such as ‘AI Growth Zones’, which aim to streamline the planning process and support the delivery of new infrastructure.
“The impact of AI is one of the most significant trends shaping the future of the data centre industry,” continues Ed. “As AI technologies become integrated into daily operations, the need for high-performance data centres is becoming critical.
“Operators are investing in hyperscale facilities outside of urban areas, designed to manage immense computing workloads.”
While London and the Southeast have traditionally dominated the sector, data centre development is now expanding nationwide. Barbour ABI found that regions such as the Northeast, East of England, and Wales are becoming increasingly attractive for new projects.
This shift is being driven by greater land availability, lower costs, cooler climates, access to renewable energy, and targeted regional growth policies.
The UK’s largest planned data centre project is located at Northumberland Energy Park in Blyth. Backed by US asset management firm Blackstone, the development is expected to be worth £10 billion.
Whilst the sector seems ripe for investors looking for big wins in the next few years, Ed does add a note of caution, stating, “While the headline story for data centres is one of growth and innovation, the industry faces real challenges.
“Rising energy costs, constraints on supply and land, planning barriers, and a shortage of skilled labour could all affect the pace of expansion.”
