In light of significant delays in accessing the electricity grid, data centre developers in the UK are now exploring connections to the nation’s gas pipelines and are planning to establish their own gas-fired power generation facilities.

According to Future Energy Networks, a representative for pipeline operators, the gas distribution networks have received over thirty inquiries regarding data centre connections within just the past six months.

This shift towards gas solutions poses a potential conflict for the UK’s aspirations in artificial intelligence (AI), as it contradicts the country’s decarbonisation objectives.

Many emerging AI companies are also considering relocating due to the high industrial energy prices in the UK, which significantly inflate the operational costs for the data centres they require, as noted by a prominent technology investor.

Rob Jesudason, CEO of Serendipity Capital, cautioned that unless the UK can provide energy costs that are competitive on a global scale, the government’s AI strategy might face failure, leading to an exodus of tech start-ups.

The current situation highlights the critical need for affordable and reliable electricity access if the UK is to fulfill its ambition of becoming a leading force in the AI sector. AI technologies demand substantial computing resources from data centres, which in turn consume large amounts of electrical power.

Developers of data centres have long expressed frustration over their challenges in securing grid connections, as many regions of the UK’s electricity network have reached full capacity, resulting in waiting times that can extend over a decade.

In a trend that threatens to derail the UK government’s decarbonisation efforts, numerous developers are now opting to avoid the overly congested electricity grid and are instead pursuing gas connections, which can be accomplished in as little as six months.

These developers plan to utilize the gas to fuel their own combined heat and power facilities. Future Energy Networks mentioned that while connections have not been completed yet, these inquiries are being actively pursued by the networks involved.

One executive from a gas network remarked during the annual UK Utilities Risk Report: “They are approaching us for gas network connections to construct mini gas power stations for their data centres, as we have the available capacity and can facilitate that easily.”

They are willing to invest in a small gas power facility to support their data centre operations because, according to the electricity network, they face prohibitive costs or extended wait times such as being told to wait until 2038 with an estimated expense of £10 million.

Jason Payne, who oversees data centre affairs at risk management firm Marsh, which collaborated on the report with Utility Week, pointed out, “Data centres are becoming an increasingly vital component of the UK economy, yet our current electricity infrastructure is failing to meet their growing power requirements. We urgently need substantial upgrades to our electricity grid to prevent an unsustainable dependence on gas infrastructures.”

Jesudason from Serendipity, a Singapore-based venture capital firm with investments in UK quantum computing, expressed concern, stating, “AI start-ups we’re in discussions with are contemplating relocation. Many countries are developing national strategies for data centres, which is not currently seen in the UK.”

He criticized the government’s renewable energy initiatives, deeming them a “reckless ideological approach,” and advocated for the construction of more nuclear power facilities to ensure lower energy prices in the future.

A spokesperson for the government responded, asserting, “Our clean power action plan will facilitate the growth of new energy-intensive industries, including data centres. The AI Energy Council will seek avenues for investments and encourage the development of low-carbon energy sources for data centres.”

“We are collaborating with Ofgem and network companies to overhaul the outdated connection processes and accelerate the establishment of new infrastructure, thus freeing up grid capacity and simplifying timely connection processes for data centres.”