Data centres and the UK government’s National Planning Policy Framework

At the start of this year I was invited to join a panel at the Built Environment Networking event, Data Centres - Supporting Digital Connectivity, where I was fortunate to share the platform with Emma Fryer, our industry’s very own champion of all things data centre at techUK, Paula Flannery from Procore and David Watkins at Virtus.

Our discussions highlighted the growing importance of industrial-scale data centres to the UK’s digital economy, and evidenced that the Covid-19 pandemic drove both business and consumer demands for data, high performance connectivity and the increasingly digitised nature of today’s businesses.

Data centres are in many respects, no longer in the shadows. Our industry has become a foundational component of the digital transformation efforts taking place across the financial services, enterprise, life science, healthcare, and education sectors. And while the growth of high performance data centre capacity was accelerating long before the pandemic, the demands placed on digital infrastructure during the first lockdown were unprecedented.

In the earliest parts of the pandemic techUK worked tirelessly to negotiate key worker status for data centre professionals who were pivotal in supporting the move to remote working and the accelerated efforts of life science and pharmaceutical research organisations. These are just two of many instances that prove why our industry must remain part of the national planning and implementation strategies, and are essential to maintain the UK’s position as a global leader within technology.

In the era of digital business, very few organisations today, including those working in the industrial, pharmaceutical and startup sectors, can operate successfully without mission-critical infrastructure hosted in a data centre. It is therefore perplexing how data centres, and the digital infrastructure that supports them, are not included in the government’s National Planning Policy Framework! This is something techUK is approaching head-on, and the organisation is doggedly building awareness with policymakers to emphasise the changing face of data and the escalating demand for digital services.

Data centres are indeed CapEx and investment intensive. They require secure financial commitments to move from planning and development to fully operational multi-megawatt sites. From inception Kao Data was backed by forward thinking investors via the Goldacre Noé group, and was the first UK data centre to gain the backing of a major UK institutional investor, Legal & General Capital, in 2019. More recently our organisation has also secured further funding from Infratil Limited, a global infrastructure business.

All of these strategic investments have come at crucial points in our business’s evolution – from breaking ground on our first facility in Harlow, KLON-01, to scaling our high performance platform across the UK with acquisition of our Slough and Northolt facilities. In fact, the UK data centre market alone is now valued at around £8.4 billion and the UK digital economy accounts for over 7% of GDP, these points alone should warrant political recognition and involvement in national policy development.

Power provision and connectivity also remain essential to the wider development of the data centre industry and it is estimated that 70% of UK data centre sites are based in or around the M25, with West London and Slough demonstrating heavy clustering. Slough, in fact, remains the world’s second largest data centre hub and is a preeminent destination for the hyperscale, financial services and enterprise communities.

Another interesting insight from techUK is that since 2016, the London colocation market alone has grown from around 500MWh to 800MWh, and the high density data centre clustering in Slough has begun to cause power provisioning challenges for future expansion.

One response to this is around the growth of mergers and acquisition (M&A) within the industry, something best illustrated through our own acquisition of new data centres in Slough and Northolt. Both will adhere to our high performance and sustainability principles, and Slough in particular will become OCP-Ready™ and NVIDIA DGX-Ready data centre certified, providing industrial-scale capacity for cloud, enterprise, HPC and AI organisations.

Increasing demand for digital services from all economic sectors has seen a growing trend of data processing continue to migrate to colocation data centres. Furthermore, we are witnessing more AI startup customers taking a hybrid approach to their hosted and on-premises infrastructure. Here, some are repatriating their data from Tier I and II cloud providers to facilities like ours, which offers greater performance, more flexibility, faster resolution times, and significantly reduced costs.

Increasingly, customers’ data needs are latency dependent, which means access to dedicated high performance connectivity, world-leading cloud providers and dark fibre cabling is essential. In fact, new subsea cabling is landing in the north of England, as well as other regions, so as connectivity requirements expand we believe it will create more opportunities for data centres to become a significant force in the government’s Build Back Better and Levelling Up strategies.

As an industry we need to collaborate more closely and provide a strong commitment to guide and influence government, local authorities, and utilities suppliers. This will be essential, as the UK continues to position itself as a global leader in data centres, enterprise and in tech.