The House Article | Why Gas-Powered Data Centres Could Soon Be Coming To Britain

Gas turbines at Elon Musk’s xAI data centre in Memphis, USA. (Associated Press / Alamy)

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By Keir Starmer’s own admission, AI – and the scramble to support its development – is the “global race of our lives”. Just over 12 months ago, the Prime Minister pledged that Britain would be at the front of that race and become “one of the great AI superpowers”.

Perhaps the most significant barrier to realising that ambition is the UK’s ageing electricity grid, which is heavily congested – especially in parts of the country where AI companies are most interested in sitting their data centres.

The government knows this and is establishing ‘AI growth zones’ in areas that can demonstrate access to at least 500MW of power capacity by 2030.

Yet for AI companies, the pull of Greater London and other energy-constrained urban areas is considerable. Being close to those places means better proximity to internet exchanges and to many of their key customers, such as tech firms and financial services.

Providing energy connections to data centres is seen as urgent for the country’s economic growth, but experts agree that there is a mismatch between what the grid can realistically deliver in the short term and the speed with which the government wants to see these facilities built.

While this situation is not unique to the UK, according to consultancy Ember Energy the average wait here for a data centre seeking a grid connection – around nine years – is longer than in many other countries.

To get round those grid constraints, data centre developers across the world are increasingly turning to gas.

In 2025, the US almost tripled its planned gas-fired capacity to 252GW. According to Global Energy Monitor (GEM), a US-based NGO, more than a third of that capacity is intended to provide on-site power generation for data centres.

Gas-powered data centres have also been built or are in development in Ireland and a handful of other European countries.

While GEM is not aware of any UK data centres currently using gas-fired power plants as their primary energy source, there are indications that such projects are on their way.

The House has learned that National Gas, the private operator of Britain’s gas transmission network, has so far received eight separate enquiries from data centre developers about the feasibility of getting a pipeline connection to their facilities.

All but one are located in the South of England. While no formal applications have yet gone live, a few have submitted draft applications through National Gas’ customer hub.

National Gas’ understanding is that these projects are interested in the option of temporarily using the gas network as their sole power source. Once an electricity connection becomes available, the gas could then be used as back-up generation or to provide balancing services during periods of tight electricity margins.

Howard Forster, chief operating officer of Cadent, one of the UK’s regional gas distribution companies, says having a gas link is attractive for data centre developers who may be wary of relying solely on the electricity grid.

“I suspect they may go for both types of connection in any event, in order to have that resilience. Like many large industrial users, they look for that resilience from the get-go, rather than being a response to a delay,” he tells The House.

“But certainly, what the connection will allow them to do is progress their project sooner rather than later in some instances, for sure.”

Cadent has struck nine connection agreements with data centres over the last year, with gas expected to start flowing to some of them over the coming months. As the locations and scope of those projects is commercially confidential, however, it is unclear whether some or any of them intend to use the gas as their sole power source.

Forster adds that the carbon impact of gas-burning can be mitigated through the use of purchase agreements with biomethane producers. Cadent already has 47 biomethane producers connected to its network and is working to increase that number.

But it is clear that in overall terms a surge in gas use by data centres would have an impact on the UK’s 2030 clean power mission. Under that target, the government wants at least 95 per cent of Great Britain’s power generation to come from “clean” sources in a “typical weather year” from 2030 onwards.

Tone Langengen, a senior policy adviser at the Tony Blair Institute for Global Change (TBI), believes the adoption of some gas power as a “bridging” approach – while more renewable power sources are being developed – would be a “pragmatic” way for the government to achieve its AI growth ambitions. In October, TBI published a report arguing that the government should drop the 2030 clean power mission.

“Our view is that is the wrong target at this moment and it is much more important that the UK thinks about a slightly slower paced, but more effective, route to net-zero, which maintains our competitiveness in the AI era,” says Langengen. “That means keeping energy bills low, making sure we can build the data centres we need…

“I think nuclear will be a really big part of the solution in future, but we can’t wait for those to be developed.”

In its UK Compute Roadmap, the government revealed its “forecast” that “the UK will need at least 6GW of AI-capable data centre capacity by 2030”, a threefold increase on data centre capacity at the time of the document’s publication in July last year. 

But even that scale of increase may have been an underestimate, as it cautioned: “Should the capabilities and adoption of AI accelerate, demand could exceed this baseline significantly.”

Whether gas can play an increased role in the UK’s AI economy is being discussed at the highest level. Some of the biggest names in the sector – Google, Microsoft, Amazon and others – hold regular meetings via the AI Energy Council with Science Secretary Liz Kendall and Energy Secretary Ed Miliband.

Minutes from the group’s June 2025 meeting state that “temporary on-site generation, including natural gas fuel cells, was raised as an interim measure to meet power needs during grid connection delays”. The minutes do not make clear which attendee raised the topic.

Experts in the sector tell The House that the issue remains a source of tension between the Department for Science, Innovation and Technology (Dsit) and the Department for Energy Security and Net Zero (Desnz).

“There is quite a lot of internal friction and issues between those teams,” says one expert, who adds that it is “unclear” whether No 10 realises that there may be a conflict between their AI ambitions on the one hand and the clean power mission on the other.

Another expert says the government has failed to seriously engage with the issue: “The Cabinet don’t understand the scale of the problem and the trade-offs that they’re facing. There’s this kind of mythology that everything will work out, when fundamentally it won’t.”

Perhaps the clearest clue to the government’s thinking in this area emerged at a select committee hearing in late January with the energy minister Michael Shanks, who said the AI Energy Council’s discussions had been “forward-leaning” on the topic of “self-build” power solutions.

Polly Billington, Labour MP for East Thanet and a former adviser to Miliband, asked Shanks: “Do you feel that the adoption of gas-fired power stations would be ‘forward-leaning’?”

The minister replied: “Obviously, our clean power action plan is to decarbonise the power system. So, it is not going to be our position that – post-2030 – we should see unabated gas, and that’s very clear from us.

“But there’s a need for us to provide capacity for the data centres that we want to bring to this country, for hugely important economic growth reasons, that [means] we will be open to how a self-build model might work.”

New infrastructure must be future-proofed, not locked into the broken fossil fuel model of the past

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Labour’s environmentalist MPs will be watching such developments closely.

“Relying on gas is outdated, risky and exactly what drove the energy bills crisis for British industry in the first place,” Billington tells The House. 

“New infrastructure must be future-proofed, not locked into the broken fossil fuel model of the past.”

Olivia Blake, chair of Parliament’s cross-party Climate and Nature Caucus, meanwhile says the prospect of gas-fired data centres in Britain is “really concerning” and that it would be “interesting” to hear the view of the UK’s independent Climate Change Committee.

“We know they [data centres] require a huge amount of energy, so it would be quite a significant amount of gas that would be burnt,” the Labour MP for Sheffield Hallam says.

“I think the government has been incredibly ambitious, they’re really doing exceedingly well on offshore wind, and we’ve seen some really good policies coming through Desnz. It would be a shame for that to be undermined by this new strain on the gas network.”

A spokesperson for the National Energy System Operator (Neso) commented: “The demand pipeline is a critical lever for unlocking capacity and enabling projects that matter most for the UK’s economic growth and ambitions in areas such as AI and data centres.

“Alongside government and Ofgem, Neso will work with the wider energy industry to shape reforms that balance innovation, fairness, and system resilience.”

A government spokesperson said: “The AI Energy Council is exploring opportunities to attract investment and support the development of clean power for data centres.

 “We are also working with Ofgem and network companies to reform the outdated connections process and speed up delivery of new infrastructure, freeing up grid capacity to make it easier for data centres to secure a timely connection.”

Ofgem, the energy regulator, confirmed it will publish an update on those reforms “in the coming weeks”.