UK kicks off AI Growth Zones, but power constraints threaten ambitions

Power access will determine the first Growth Zones

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Access to power sources like nuclear stations and wind farms will determine the location of the first AI Growth Zones

The government’s AI Growth Zones initiative plans to revive the UK’s deindustrialised areas, but power capacity stands in the way.

The UK government has commenced its AI Growth Zones initiative, which aims to turn deindustrialised regions into AI hubs and strengthen the country’s role in the global AI economy.

As part of the broader AI Opportunities Action Plan announced early this year, the scheme is designed to fast-track AI infrastructure, create jobs and attract private investment.

Local and regional authorities are now bidding for their areas to be designated as AI growth zones.

The government is prioritising locations with strong power access or the potential to support large-scale energy projects, such as nuclear or wind farms.

The chosen zones will benefit from streamlined planning permissions for datacentres and fast-tracked energy grid connections, capable of handling demands exceeding 500 MW.

Culham in Oxfordshire, home to the UK Atomic Energy Authority, will host the first confirmed Smart Energy Zone. This site will be a testing ground for combining sustainable energy solutions, like fusion technology, with AI-powered industries.

Several other regions, including Scotland, Wales, the Northwest and the Northeast have expressed interest in developing their own zones.

Power challenges threaten AI growth zone ambitions

While the initiative aims to open up the UK’s deindustrialised areas to growth through AI, infrastructure hurdles, particularly around power capacity, could stand in the way.

Even established datacentre hubs like London face gridlock, with connection requests far exceeding available capacity.

A recent Cushman & Wakefield EMEA Data Centre Market report for H2 2024 highlights the scale of the problem.

According to the report, London’s power grid is already clogged with 400 GW of new connection requests.

Although Ofgem's new queue management system seeks to prioritise viable projects, we can’t sweep the power bottleneck under the rug.

In addition to power constraints, limited land availability, stringent sustainability regulations, and escalating costs could pose a challenge to the country’s AI growth zones.