What does critical national infrastructure status mean for UK data centers?

The UK Government’s recent decision to classify data centers as critical national infrastructure (CNI) has been welcomed by many in our industry. The CrowdStrike outage was a good reminder of how vital it is for businesses and public sector organizations to have uninterrupted access to secure data sources. The new classification is a long-awaited stake in the ground to acknowledge the growing importance of data centers in providing this level of security and reliability.

I agree that awarding critical national infrastructure status is an important first step in recognizing data centers as a vital component in maintaining economic stability, national security, and day to day life for the general public - not just in the UK, but globally.

That said, I think we need to treat this new pledge with a certain level of caution. With the rise of technologies like artificial intelligence requiring far greater levels of compute power, we’re going to see heavier demands placed not only on data centers but the infrastructure that supports them.

Higher computational demands of dedicated AI data centers draw far larger quantities of electricity from the grid, and the development of new data centers is only going to add to this strain. The UK still imports a significant amount of its electricity, so we should question whether promoting new investment into the UK’s data center scene is a wise move. Will the UK’s existing infrastructure be able to support additional data centers?

Of course, this announcement also raises several questions in terms of cost. Running new data centers on greater quantities of imported electricity will see prices rise, though whether these costs are reflected in fees to end customers is still unknown. However, such questions of cost would hang heavily over any data center developer. The new critical national infrastructure classification aims to “boost confidence in investing in data centers in the country”, but will the appeal be so strong if running costs remain high?

The UK is currently home to the highest number of data centers in Western Europe, but I believe many lessons can be learned from other major data center hubs across the globe. Take the successes of data centers developed in Texas, for example. Not only does the location provide an abundance of space - something that comes at a financial premium in the UK - but it offers incredibly low energy costs. This is in addition to the range of development incentives and tax reliefs offered to stakeholders looking to create new sites. The question is, will the UK be able to compete long term without the offer of financial reliefs for prospective investors?

Details on the new CNI classification are still vague, but there is incredible optimism for the data center industry both in the UK and across Western Europe. And, with plans for Europe’s largest data center - DC01UK - submitted for potential development in southern England, I predict we’ll see a range of subsequent announcements made by the UK government to help further support new sites.