Britain’s AI ambitions face delays from planning and energy challenges, report warns

The UK risks losing momentum in the global race to build the infrastructure for AI because of planning and energy constraints, according to a new report from the Centre for British Progress think tank. The study, Unblocking AI Growth Zones, argues that outdated regulatory processes, environmental approvals and pressure on the electricity grid could slow or derail major data centre projects. The authors say that while private investment of more than £30 billion has been committed to new sites, barriers in the planning system may prevent projects from being delivered quickly enough to compete internationally.

The report points to rising global demand for AI infrastructure. It highlights forecasts that the largest technology companies will invest $375 billion in compute capacity this year, rising to $1.2 trillion by 2029. In that context, it argues that “time is the enemy” and that even modest delays in approval could see projects moved to other countries.

While the UK benefits from a mature data centre market, skilled workforce and a location between North America and Europe, the report suggests it risks losing out to countries such as France and the United Arab Emirates, which have already accelerated investment in large-scale AI facilities.

Planning and consent

The authors argue that the UK’s existing planning rules are not suited to the speed required for new infrastructure. They cite overlapping consents, lengthy consultations and the potential for judicial reviews as obstacles.

One proposal is for a “Building Britain Act” that would simplify approvals in designated AI Growth Zones. Under such legislation, developments would receive deemed consent for certain types of projects, with central government setting the main conditions. The report also recommends creating a dedicated AI Growth Zone Authority, modelled on the Olympic Delivery Authority, with responsibility for coordinating land assembly, consents and delivery within the zones.

If such changes prove politically difficult, the authors suggest more limited reforms, including strengthening the National Policy Statement for data centres, tightening statutory deadlines, and streamlining the Nationally Significant Infrastructure Projects regime.

Environmental regulation

The report emphasises that environmental standards should be maintained but delivered more efficiently. It proposes that each AI Growth Zone undergo a Strategic Environmental Assessment at the outset, with projects that comply automatically approved. This would remove the need for separate Environmental Impact Assessments for every development within a zone.

Further recommendations include standardised Environmental Delivery Plans, a levy to fund local environmental improvements, and adjustments to thresholds that trigger assessments. The authors also argue that minor project variations should not require re-assessment, and that the scope of certain obligations such as the Habitats Regulations should be clarified to reduce uncertainty.

Electricity demand

Energy is described as another critical barrier. The report estimates that UK data centres currently use around five terawatt-hours of electricity per year, about two percent of national demand, with consumption potentially rising to 22 TWh by 2030.

The authors point out that data centres require extremely high reliability and that demand can fluctuate significantly, placing additional stress on the grid. At the same time, they note that much of the UK’s firm low-carbon generation capacity is due to decline, potentially tightening supply margins.

Grid connection delays are identified as a major obstacle. With more than 800 gigawatts of projects already in the connection queue, the report warns that new data centres could face long waits for access. It calls for greater competition in transmission, expanded low-carbon generation and a more strategic approach to grid connections for AI infrastructure.

Regional and workforce implications

According to the authors, delays in delivering AI Growth Zones could influence business location decisions and reduce the UK’s attractiveness to investors. They argue that regional authorities stand to benefit from jobs and investment if projects go ahead, particularly in areas designated for new zones such as former industrial land and port regions.

The report also suggests that ensuring timely delivery of AI infrastructure could anchor high-value technical and operational roles in the UK, rather than seeing them shift overseas.

The study acknowledges that reforms would need to comply with the UK’s legal obligations, including environmental commitments, the UK–EU Trade and Cooperation Agreement, and the Aarhus Convention on public participation. It notes that changes to judicial review, such as limiting repeat claims or fast-tracking hearings, could reduce delays but may also face opposition.

The authors of the report concludes that without action, planning and energy challenges could undermine the UK’s AI ambitions. It recommends reforming the planning system, introducing more efficient environmental regulation, and addressing electricity supply and grid access in order to support future AI Growth Zones.