The UK has launched a covenant offering critical data centres priority grid connections if they meet local obligations, as it seeks to expand domestic AI capacity.
Chancellor John Healey announced the British Data Centre Covenant in his Budget speech.
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Under the arrangement, critical data centres that pass strict tests will receive the grid connections they need. Where necessary, they will also be permitted to develop on-site generation while waiting for a connection.
The criteria require developers to invest locally, provide jobs, and safeguard water supplies.
The government has also offered planning support for strategically important data centres, although the Budget speech did not set out how that support would work.
This measure is intended to keep sensitive data under British control as the use of AI in public services and defence grows.
Healey said: “When the NHS uses AI to treat patients, we want that data here. When our Armed Forces use AI to keep us safe, we want that data here.”
Britain projects that its AI-ready data centre footprint must grow three times by 2030 to prevent excessive reliance on overseas computing resources, Reuter reported.
Global law firm HSF Kramer partner Catherine Howard said: “Securing sufficient power is one of the greatest challenges that datacentre developers face.
“If the Chancellor is offering to bump datacentres up the grid connection queue if they commit to delivering a range of social benefits, then that may be a deal they welcome. But it will depend what the ‘strict tests’ to be met are. As ever, the devil will be in the detail.”
HSF Kramer senior associate Naomi Hoggett said: “It will be crucial that the covenant is properly structured to sit alongside existing section 106 agreement policies (which often include requirements relating to environmental standards, heat export and local jobs and apprenticeships) so that data centre developers are not being asked to sign up to overlapping or conflicting requirements.”
“It is not yet clear if the covenant is intended to sit outside the planning system or if it will be imposed via existing planning frameworks. It will also be essential to understand the scope of ‘strategic data centres’ and the enhanced support that will be on offer for schemes meeting the definition.”
