Data Center Operators Rush to Secure Gas Connections in the UK

Data center developers in the UK are scrambling to get their facilities hooked to gas-fired generation capacity, the Financial Times has reported, citing five such projects planned for southern England.

“The national gas transmission network is ready to play a key role in facilitating this critical investment today while working in partnership with the electricity networks,” the FT quoted the chief commercial officer of National Gas as saying in comments on the news.

The Starmer government has made artificial intelligence one of its top priority areas of future economic growth, alongside its net-zero plans that involve a substantial reduction in the share of oil and gas in the UK’s energy mix—but not just yet.

According to the Financial Times report, the developers of those five data centers in southern England had already submitted formal applications to National Gas to get connected to the gas network. At the same time, some developers were planning to build their own gas-fired power plants because of the long waits for national gas grid connections.

The proliferation of data centers has turbocharged electricity demand growth, prompting a rush to secure reliable generation capacity. In the United States, power utilities are set to spend $212.1 billion in capex this year, which would be a 22.3% increase on the year as they race to secure new electricity supply for data centers.

In the UK, data centers are also driving an investment rush in nuclear. Earlier this year, the Starmer government said it would partner with Big Tech majors to pursue an expansion in nuclear capacity to respond to the power demand of data center operators. Natural gas, however, has emerged as the Goldilocks power generation source for the AI industry as it can be built faster than a conventional nuclear power plant and generates lower emissions than a coal plant, while providing baseload supply, unlike wind and solar.

By Irina Slav for Oilprice.com