London has 400 GW of grid requests holding up datacenter builds

And up to 70% of stalled energy generation projects are unlikely to be approved, claims regulator Ofgem

While the UK government wants to turbocharge datacenter construction, a newly published report says there are already 400 GW worth of outstanding requests for connection to the power grid around London, and regulator Ofgem estimates 60-70 percent of these will never happen.

These figures are drawn from the EMEA Datacenter Market Update for H2 2024, published by global commercial real estate biz Cushman & Wakefield, and illustrate the challenge that face datacenter developers.

Most British server farms cluster around the capital, and projects are facing growing delays to get connected to the grid, a problem that may be exacerbated as more and more facilities are planned to serve the growing market for cloud and AI services.

In addition to power constraints, Cushman & Wakefield also highlights numerous other hurdles that datacenter builders are being confronted by across the EMEA region: limited land availability and strict sustainability regulations, all of which lean heavy on costs and project timelines.

Yet despite these circumstances, growth continues apace, especially in the key markets of Frankfurt, London, Amsterdam, Paris and Dublin – charmingly given the moniker FLAPD. The report discerns a strong development pipeline of 2.9 GW under construction across the zone, while 8.7 GW is currently in the planning stages, making for growth of about 16 percent year-on-year.

Capacity of datacenters across EMEA grew by 9 percent in the year to mid-2024 to reach 9.4 GW, and London is forecast to be the first market in the region to hit 2 GW in the next three to five years.

The report claims that Gigawatt-scale campuses are becoming more sought-after, in line with trends in the US, and new construction activity is set to double current capacities. Meanwhile, emerging markets and remote campuses sitting outside the established metro areas are reshaping the datacenter landscape.

Away from FLAPD, Milan is a rising star with 990 MW in live and pipeline capacity, while Helsinki and Oslo are also relatively new growth areas for datacenter builds. Helsinki has seen a significant increase over the past year to 594 MW total capacity, with a significant amount also at "early stage," and Oslo has grown swiftly to a total capacity of 423 MW.

London remains the largest bit barn market in EMEA and the second largest globally. Cushman & Wakefield says it had 1,141 MW in operation as of H2 2024, representing a 15 percent year-on-year increase.

England's capital will be the first market in EMEA to reach 2 GW in the next three to five years, but this depends on its ability to deliver on its 1.5 GW pipeline of projects.

But power constraints seem to be a particular issue in and around London, which won't be news to many people, with 400 GW worth of connection requests said to be in the queue. The report claims that 60-70 percent of these connections will "fail to materialize."

Cushman & Wakefield highlights a revised queue management system launched by Ofgem in November 2023 with the aim of fixing this, removing "zombie projects" and accelerating the connection process for viable ones.

The energy regulator said at the time: "The change is a big step away from the existing 'first-come, first-served' system, which has led to a long queue of energy projects which could generate almost 400GW of electricity – well in excess of what is needed to power the entire British energy system.

The findings in this report pre-date the announcement of the AI Opportunities Action Plan by the new Labour government, of course, which aims to ramp up the building of datacenter projects with special "AI Growth Zones" and planning rules adjusted to help get speedier access to the energy grid.

However, it does highlight recent developments such as an 80 MW facility in the Borough of Newham getting approval; the 320 MW mega datacenter site that was green-lighted in Hertfordshire, close to London's M25 orbital motorway; and Yondr Group securing planning permission for a third building on its 100MW+ capacity campus in Slough, to the west of London.

Power issues aren't just a problem for the UK, and the report even claims that in Germany, demand is reported to be higher than the total power available for the country. This is putting pressure on management of grid infrastructure, with timelines for connection anything between three and ten years. ®