The rapid growth of “energy-hungry” data centres is delaying new homes in London, just as its housing crisis is “at its worst”, a new report has warned.
Data centres are giant warehouses full of powerful computers used to run digital services, such as streaming and artificial intelligence.
However, they require masses of electricity from the National Grid to keep running.
According to the report from the London Assembly Planning and Regeneration Committee, some new housing developments in west London were temporarily delayed after the electricity grid reached full capacity.
The committee’s chair James Small-Edwards said energy capacity had become a “real constraint” on housing and economic growth in the city.
In 2022, the General London Assembly (GLA) began to investigate delays to housing developments in the boroughs of Ealing, Hillingdon and Hounslow – after it received reports that completed projects were being told they would have to “wait until 2037” to get a connection to the electricity grid.
There were fears the boroughs may have to “pause new housing altogether” until the issue was resolved.
But the GLA found short-term fixes with the National Grid and energy regulator Ofgem to ensure the “worst-case scenario” did not happen – though several projects were still set back.
The strains on parts of London’s housing highlighted the need for “longer term planning” around grid capacity in the future, said the report.
It added that while data centres made up fewer than 10% of the UK’s total electricity demand last year, that was expected to rise up by to 600% between 2025 and 2050.
It estimated the energy usage of one typical data centre was similar to that of roughly 100,000 households.
Figures shared with BBC News in August showed an estimated 447 data centres currently in the UK, with that number set to rise by about 100 in the next few years.
More than half of new data centres are planned in and around London.
Andrew Dakers, chief executive of industry body West London Business, told BBC News the area was proud to host “so much digital tech and investment”, but that it came with challenges.
“At the moment National Grid are looking to try and get 7 GW of additional power into west London by 2037,” he said. “Our ask is that needs to happen faster… 12 years is just too far. The demand is here and now”.
Rhodri Williams, technical director of the Home Builders Federation, told BBC News it was “essential” the government made sure there was “adequate investment” into the supply network to support housing developments.
Among a list of recommendations, the committee suggested introducing a separate planning category for data centres, to ensure better energy coordination.
A government spokesperson told BBC News it was exploring “bespoke options”, including through the AI Energy Council, to support data centres and the housing sector.
The report also called on Mayor of London Sir Sadiq Khan to include a dedicated data centre policy in the next London Plan.
A spokesperson for the mayor told BBC News they are working to include “how to best address the need for data centres in London” in the next London Plan, and would “carefully consider” the recommendations of the report.
“Under Sadiq, we have seen more new council home starts in London than at any time since the 1970s and, prior to the pandemic, more new homes completed in London than any time since the 1930s,” they added.
Additional reporting by Jess Warren.
