Data centres play a crucial role in creating thriving digital economies. Recognised as nationally critical infrastructure in the UK, the soaring demand for data centres is fuelled by several key factors, including the exponential increase in data generated by individuals and businesses, the growth of online activity, the rapid advancement of Artificial Intelligence (AI), and other next-generation technologies.

However, meeting this demand is becoming increasingly challenging. Traditionally focused on hotspots around the South East, data centre development in the region is reaching capacity due to a shortage and higher cost of land, as well as widespread power availability constraints. The grid is under acute pressure, with a 5% increase needed in grid capacity to accommodate the current pipeline of data centre projects alone.

Rapidly accelerating AI adoption will only increase demand for data centres capable of accommodating the much higher density, computational power and storage requirements. In parallel, there is the vital consideration of ensuring delivery strategies that are sustainable in the long-term, especially given that data centres account for 2.5% of total electricity consumption in the UK and are highly energy intensive.

As a solution to these challenges, attention is gradually moving towards the North, with Scotland emerging as holding tremendous potential to lead the next wave of data centre development. The reasons are multifaceted and compelling.

Compared with the South East, there is good land availability to build in Scotland, while the naturally colder climate offers immediate advantages by maximising efficiencies when it comes to cooling data centres, a process that typically carries significant energy use and cost implications. This aligns with wider decarbonisation efforts across the built environment, as well as national net zero targets. While the UK’s overall target is 2050, Scotland is working to an even more ambitious objective of 2045.

The Scottish Government is strongly supportive of investment in technology and infrastructure, with goals including strengthening the country’s position as a leading location for green data centre facilities of all sizes, encouraging investment into this burgeoning sector and offering a competitive landscape in terms of both commercial and environmental benefits.

There has been substantial investment into network infrastructure, for instance, which can provide robust connectivity and grid capacity, essential for consistent and reliable data centre operations. This is complemented by the fact that Scotland already boasts abundant renewable energy, largely in the form of wind and hydroelectric power, with the latest official figures showing that 70% of all electricity generation across Scotland in 2023 originated from renewable sources. There is ample capacity for renewable-powered data centres, therefore, a boon for sustainable and scalable data centre development in a world shifting away from fossil fuels. This is also appealing for organisations looking to reduce their own carbon footprint, utilising greener energy solutions, and there are good examples already of offshore wind being connected into Scotland, such as at Grangemouth.

As part of its Green Datacentres and Digital Connectivity Vision and Action Plan, Scotland’s government recognises that capitalising on the considerable opportunities of AI, the Internet of Things, Cloud computing and other cutting-edge technologies, depends on putting the effective storage and movement of data high on the agenda.

Key differences of data centres designed for AI include the fact that, while Cloud data centres need to be triangulated to form Availability Zones, AI data centres do not; Cloud data centres also need to be close to usage for latency and capacity, whereas AI data centres do not need to be close to users and just require high-capacity fibre links; as such, given these factors, AI data centres can be single sites and remote from conurbations.

With a vision to be recognised as one of the most innovative small countries worldwide, on a par with Norway, Denmark and Finland, there are various initiatives and incentives in Scotland aimed at encouraging businesses to establish operations there, from resources like the Techscaler scheme, to tax relief and access to a range of funding options. Key regional cities including Edinburgh and Glasgow are becoming leading technology hubs, attracting both startups and established companies. This, in turn, cultivates a successful ecosystem that fosters growth, innovation and a skilled workforce.

As companies seek to diversify their data centre locations for better resilience, Scotland presents a truly attractive and competitive choice, especially for those seeking to operate in the UK. It is a region where we see incredible possibilities in the coming years, expanding our own team in Glasgow with a focus on leading data centre projects in addition to power and sustainability input. As we enter an era where industries continue to evolve and become data-driven to grasp the unprecedented impact of AI and succeed in fast-changing markets, Scotland stands out as the next big attraction for data centre development, for the UK and as a major European player.