UK AI industry relies on natural gas to power its data centers

The UK AI sector is temporarily turning to fossil fuels while trying to secure sufficient and stable power to run the data centers needed to support the technology in the country.

Technology firms have frequently committed to reducing carbon dioxide emissions. However, the immediate need for fast and dependable energy supply is pushing data center developers toward fossil fuels.

UK data centers tap gas pipelines to meet urgent needs

National Gas, the private owner of Britain’s gas transmission system, confirmed that five major projects in southern England have made formal enquiries about connections to its network. The prospective operators indicated interest in building on-site gas-fired power stations, which could provide stable electricity during lengthy waits to connect to the national grid.

“The national gas transmission network is ready to play a key role in facilitating this critical investment today while working in partnership with the electricity networks,” Ian Radley, the chief commercial officer at National Gas, said. The company is owned by Australian asset manager Macquarie.

Collectively, the five projects would require roughly 2.5 gigawatts of capacity, which is equivalent to supplying several million homes.

The AI boom is straining power sources

Data centers have long required large amounts of electricity for computing and cooling, but the rise of artificial intelligence has greatly increased this demand.

Nvidia’s chips, which dominate the market for AI computing, consume significantly more power than traditional cloud servers used for web hosting or enterprise applications.

The UK government has made expansion of AI infrastructure a central priority, branding the coming years as a “decade of national renewal.”

Ministers recently selected Teesworks, the former steelmaking site in north-east England, as the location for Britain’s second “AI Growth Zone.”

However, securing timely electricity connections poses a challenge. Britain’s grid has been plagued by long queues and high costs for both generators and consumers. Nvidia chief executive Jensen Huang warned Prime Minister Sir Keir Starmer earlier this year that delays risked leaving the UK behind international rivals, despite its scientific expertise.

The International Energy Agency projects that global data center electricity demand could more than double to 945 terawatt-hours by 2045, exceeding Japan’s entire current consumption.

In the US, developers have increasingly turned to gas-fired power to keep pace with demand. Siemens Energy recently credited a surge in orders for gas turbines from American data centers as a key factor in its record order backlog of €136B ($159B).

Research by Global Energy Monitor shows more than 85 gas-fired plants worldwide are being developed to support data center growth. Elon Musk’s AI venture, xAI, initially relied on gas turbines to power its vast “Colossus” data center in Memphis, which hosts over 100,000 Nvidia chips, before shifting some units to backup use after it secured a grid connection.

Industry experts say gas is rarely used to power data centers permanently. Instead, it acts as a stand-in before companies are able to make grid connections available.

Teodora Kaneva, head of smart infrastructure and systems at TechUK, called grid access and electricity pricing “one of the biggest challenges for investments in the UK.” She cited a case where a data center expecting extra capacity this year will now have to wait until 2037.

“You make sure that if option 1, 2, 3 and 4 don’t work, you have another option further down the line,” Luisa Mostarda, a senior energy consultant at Savills, said.

National Gas stressed that the recent enquiries are not guaranteed to lead to actual connection requests.

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