Grid delays force Starmer-backed AI data centre to seek alternative power
One of the UK’s flagship AI infrastructure projects is being forced to source its own energy supplies after discovering it would not be granted electricity by the national grid in time for its eagerly anticipated opening.
Nscale, the British AI unicorn backed by Nvidia, is now looking beyond conventional electricity connections for its flagship £2bn data centre in Essex, CityAM has learned, after it discovered that grid delays meant would not have power by the time the project is completed.
An Nscale spokesperson said: “We remain fully committed to the Loughton project.”
The Essex facility, which Microsoft has signed up to as an anchor customer, forms part of the government’s push to establish Britain as a global AI infrastructure hub. But its difficulties sourcing power underscore troubles facing the country’s fledgling data centre industry, whose players are heavily reliant on vast supplies of energy to power their servers.
The setback comes despite Nscale securing planning permission and a 90MW grid connection just six days ago, but the electricity supply is now expected later than originally anticipated.
“We’re committed to connecting projects to the grid as quickly and efficiently as possible, while maintaining a safe, reliable and resilient network”, said a spokesperson from National Grid.
“Where network reinforcement is needed to facilitate a connection, we work closely with industry partners to explore opportunities to accelerate delivery while ensuring the continued safety and resilience of the system.”
The UK’s grid bottleneck
Long waiting times for electricity connections have become one of the biggest obstacles to delivering new AI infrastructure, with some projects across Britain facing waits stretching close to a decade before securing sufficient power.
Developers are increasingly turning to on-site generation and off-grid gas-powered systems as a result, to avoid costly delays.
Industry data suggests more than 100 UK projects are now considering gas generation while awaiting permanent grid connections.
The issue has become increasingly acute as demand from AI infrastructure collides with Labour’s plans to rapidly electrify the economy as part of its clean power ambitions.
LCP Delta recently warned Britain is unlikely to meet its target of producing 95 per cent clean electricity by 2030, forecasting the figure will instead reach around 83 per cent unless grid upgrades accelerate significantly.
The consultancy said network constraints would force around 27TWh of renewable electricity to be curtailed by the end of the decade while gas generation continues to fill the gap.
Taco Engelaar, senior vice president at infrastructure firm Neara, said: “Britain’s dreams of data centre sovereignty will disappear if we don’t get a grip on the grid”.
“This latest delay should hammer home the fact that billion-dollar investment and political ambition mean nothing against our eminently physical infrastructure and the constraints it presents.”
Racing to power AI
Research published by Capgemini found 68 per cent of electricity executives expect power shortages as AI-driven data centre demand grows faster than networks can expand, while more than three-quarters said forecasting future electricity demand had become increasingly difficult.
Nearly a third of operators have already deployed on-site power generation, with a further 39 per cent planning to do so within the next two years as reliance on traditional grid connections becomes harder.
The issue has emerged as one of the defining challenges facing Britain’s AI strategy, with ministers prioritising data centres as critical national infrastructure while simultaneously attempting to decarbonise the electricity system. Nscale’s grid issues were first reported by the Daily Telegraph.
Last week, Nscale secured a $900m (£671m) revolving credit facility backed by a syndicate of global banks including JP Morgan, Goldman Sachs and Morgan Stanley to accelerate its international expansion.
The company has also announced sovereign AI infrastructure partnerships with BT in the UK and renewable-powered developments in Norway, where it has secured long-term electricity agreements.