A couple of weeks ago, we had the privilege of welcoming Sarah Montague from BBC 4’s World at One programme to our Farnborough data centre to discuss the vital role data centres play in supporting the UK’s modern economy. In an in-depth conversation with our Chief Revenue Officer, Cathal Griffin, we explored the rising demand for data storage, the complexities surrounding energy consumption and the future challenges of AI. If you didn’t catch the interview on Thursday 17th October, here’s what we discussed…
Setting the scene: the UK’s data centre landscape
There are over 500 data centres spread across the UK (as of March 2024), a figure that highlights the critical importance of data infrastructure to both the economy and daily life. The significance of these centres has recently been recognised by the UK government, which designated them as part of the nation’s Critical National Infrastructure (CNI). This status provides protection against potential threats, including cyberattacks and IT blackouts, safeguarding the economy and essential services.
Data centre investments are booming, with notable projects like Microsoft’s in Eggborough, Yorkshire, built on the site of a decommissioned nuclear power station. Amazon Web Services (AWS) expanding across the UK and Google setting up a vast new site in Waltham Cross, Hertfordshire.
But, Sarah asked Cathal, why are data centres so vital?
The reality is, we’re creating more data than ever before. Over the past two years, more data has been generated than in the entire history of mankind. In June 2024 alone, the world created 12 zettabytes of data, which is equivalent to 6 trillion monthly mobile phones with 6GB of data each, per month! This surge is largely driven by video, which accounts for more than half (53.73%) of all global data traffic.
Operating six colocation data centres across the UK, we help businesses to meet the escalating demand for data storage. Think of our data centres as hotels for computers: from premium suites with bespoke services for specific customers to more economical rooms where multiple businesses store data side by side. The variety in services reflects the diverse needs of companies in this digital age.
Business approaches to data and the cloud
While the public cloud was once the go-to solution for many businesses, our recent whitepaper suggests a shift in attitudes. A staggering 91% of companies are now repatriating some of their infrastructure back from the public cloud to on-premise or colocation data centres. Why the change? Organisations have encountered unexpected operating costs, security concerns, and prolonged migration times that have led to disruptions. In fact the findings highlight that 77% of those surveyed found their public cloud costs exceeded expectations, and 62% struggled with security and compliance, prompting a rethink in their data strategies.
Powering the future: the challenges of data centre growth
One of the key issues we discussed during the interview is the growing challenge of powering data centres, especially in the UK. Data centres currently account for over 2% of global electricity consumption, and this number is set to rise with the increasing reliance on technology and the rapid growth of AI applications.
The cost of energy in the UK is making it difficult for data centres to remain competitive with international counterparts. The situation is further complicated by the UK government’s Electricity Generator Levy, which imposes a 45% tax on profits from electricity generation, potentially discouraging investment in renewable energy projects.
Moreover, while the UK is making strides in renewable energy with offshore wind farms and solar projects, there are significant barriers to bringing this energy onshore and distributing it effectively. In some countries, power generation, distribution, and data centre locations are interconnected, creating more efficient and cost-effective systems. Unfortunately, the UK’s network restrictions and regulations mean that data centres are unable to access power directly from private wires, forcing them to rely on the national grid, which is both costly and inefficient.
For data centres to thrive in the UK, we need a more holistic approach to power generation and distribution. If these hurdles can be addressed, we’ll see lower costs, fewer infrastructure challenges, and a more sustainable path for future development.
AI and power demands
Another major topic of discussion, and one we covered during the discussion, was AI and the strain it places on both data and power infrastructures. The demand for AI is skyrocketing, particularly in sectors like science and medicine, where applications require up to 100 kilowatts of power per rack. Compare that to traditional IT computing, which generally needs around 6 to 12 kilowatts per rack, and it’s clear that the future of AI will require a significant increase in power capacity.
Current data centres, designed with lower power demands in mind, are struggling to meet the needs of AI applications and until we can access energy directly and efficiently, the price of scaling AI applications will remain high.
The environmental impact of data centres
Despite their growing power consumption, data centres are not among the top carbon-emitting industries. In fact, data centres rank well behind industries like agriculture, travel, and fashion. We’re proud to run on 100% renewable energy and will continue to invest in new technologies to improve efficiencies. And don’t forget that by housing data in more efficient environments, we’re helping businesses reduce their own carbon footprints when compared to traditional in-house data solutions. By powering our centres with renewable energy and investing in state-of-the-art facilities, we’re shaping the future of data while reducing our environmental impact.
Final thoughts
While the demand for data centres is soaring, the UK market faces several challenges in supporting this growth. From the rising cost of energy to the need for better infrastructure and land management, there’s much that needs to be done. By focusing on brownfield development, improving our national grid, and addressing the power supply bottlenecks, we can ensure that the UK remains a competitive hub for data storage and AI innovation.
As we, and the rest of the UK data centre industry, continues to grow, we call on the government to take a holistic approach to power generation, distribution, and data centre development. Only then can the UK unlock the full potential of its digital economy and stay ahead in the global race for innovation.
