An uncoordinated approach to power sourcing could see increasing power sector emissions by 14%, undermining the UK’s decarbonisation goals and driving up wholesale electricity prices.
OXFORD (AURORA ENERGY RESEARCH)—Aurora Energy Research, the global power market analytics provider, has today released a report examining the impact of data centre expansion on Great Britain’s energy system and the crucial importance of strategic coordination between data centres, networks, and generators. This approach could unlock £35 billion in low-carbon power investment, the report states.
The report is the result of several months of in-depth analysis and engagement with 14 key stakeholders across data centres, policy makers, networks, and energy generators. It comes at a time when the unprecedented expansion of artificial intelligence is dramatically increasing power demand on the grid. Each large data centre adds a load roughly equivalent to that of a quarter of a million electric vehicles. This surge in demand creates a critical coordination challenge between data centre operators seeking immediate grid access, renewable developers requiring long-term agreements, and network expansions that involve extended planning cycles.
Strategic collaboration between stakeholders could not only unlock billions in low-carbon power investment but also support approximately 5 GW of green data centre growth over the next decade, according to the report. Strategic planning tools, such as NESO’s Strategic Spatial Energy Plan, have the potential to support a coordinated energy system that actively enhances UK economic development — but only if they evolve to include major new demand sources like datacentres alongside traditional supply planning. Without coordination, the report finds that power sector emissions could increase by 14%, hampering the UK’s decarbonisation efforts and driving up wholesale electricity prices.
The report further assesses that locating datacentres away from London hubs and behind constrained transmission boundaries (such as in Scotland) could reduce network balancing costs and wind curtailment by up to 9%. However, these benefits decrease after 2035 as planned grid investments are completed.
Brian Potskowski, Head of Advisory for UK & Ireland at Aurora Energy Research, commented:
“The unprecedented growth in data centres presents Britain with both significant risk and tremendous opportunity. Effective coordination between market participants could drive a significant investment in clean energy. However, a failure to collaborate strategically could result in a ‘tragedy of commons,’ derailing our decarbonisation efforts and increasing costs for consumers. This is not just a challenge for the tech sector—it’s a critical inflection point for successfully delivering the energy transition.”
Richard Gwilliam, Drax Development Director, said:
“This research makes it clear: access to power is central to the UK’s data centre ambitions but without urgent, coordinated action between energy producers, network operators and the data centre sector the country risks pushing up the wholesale cost of electricity and impeding the UK’s decarbonisation targets.
“Drax continues to engage in this sector and Drax Power Station is uniquely positioned to support the next generation of green data infrastructure. By aligning investment in digital infrastructure with our energy transition goals, we can drive regional growth, decarbonise industry, and create thousands of high-skilled jobs in the North.”
David Wildash, Chief Strategy Officer at Apatura, commented:
“At Apatura, we recognise that decarbonisation and digitalisation are two mega-trends that must go hand in hand. We welcome this report, it’s clear, the UK’s green data centre sector can grow without derailing decarbonisation, but only if we build smart and in the right location. As a developer of storage and data centre projects in Scotland, we fully back the report’s call to harness high-renewable regions like Scotland. The smart siting of data centres can cut wind curtailment by 9%, lowers system costs by 8%. Zonal pricing could deliver up to £13/MWh in energy savings by 2035. It’s a win not just for operators, but for the whole system and every consumer.”
Joe Dalton, Director Asset Management at NTR, continued:
“With this study, Aurora has started a conversation that could potentially align three key entities; data centres, low-carbon power providers and grid operators. The studies point the way towards largely fossil-free data centre operation, with the potential to be additive to grid security, at acceptable cost. The discussions and investigations have confirmed that a co-ordinated approach is needed to optimise the use of existing resources and to justify new infrastructure. Above all, this body of work confirms the need for joined-up solutions to unlock real reliability, security and market efficiencies.”
Mikey Clark, Chief Executive Officer at Relode, added:
“The UK has a huge, time-limited opportunity to scale data centre growth and lead the AI revolution. But as this timely report from Aurora indicates, coordinated action is vital to meet the sector’s surging demand for power without jeopardising the country’s net zero ambitions.
“Relode’s plans to create hubs of electricity demand, strategically located for renewable generation and planned network upgrades, offer a smart and efficient solution, delivering clean power at scale to data centres and other critical industries. But first we must ensure that ongoing grid connection reforms place demand customers at the front of the queue for power. Failure to do so would be a massive blow to some of the UK’s most high-growth industries, undermining their competitiveness and damaging economic growth.”
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MEDIA CONTACT
Zina Fragkiadaki, EMEA Press Officer, Aurora Energy Research
zinovia.fragkiadaki@auroraer.com
ABOUT AURORA ENERGY RESEARCH
Established in 2013, Aurora Energy Research is a leading global provider of power market forecasting and analytics for critical investment and financing decisions. Headquartered in Oxford, we operate out of 17 offices worldwide covering Europe, North & South America, Asia, and Australia. Our comprehensive services include market outlook packages for energy industry participants, advisory support, and innovative software solutions. We foster diversity with a team of 900 experts with backgrounds in energy, finance, and consulting, offering unparalleled expertise across power, renewables, storage, hydrogen, carbon, and fossil commodities. Our mission is to ease the global energy transition through widely trusted quantitative analysis and high-quality decision support.
