Environmental Audit Committee

Wednesday 10th June 2026

(began 20 hours, 51 minutes ago)

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None Portrait Speaker 4
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Yes.
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None Portrait Speaker 4
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Absolutely.
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None Portrait Speaker 1
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Like why is that?
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None Portrait Speaker 2
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Yeah. So um, I can probably talk at length more about sort of concerns and barriers around um the use of data centres later. But um, in short on the sort of um, if you like claims about the benefits of um. Of data centres and of AI generally. Um, it's London tech week, um, on, on Monday I was, uh, I was there and watching all of the sort of mainstage, um, the sorts of claims that are being made are very much driven by, driven by an intention to create a sort of fear of missing out.

So, um, one company said the next 18 months will determine how well the UK competes in the global economy. Uh, another said the UK must not lose its head start and is sort of positioned as this being future productivity. Um, we've published a report on the methodology that sits behind a lot of the productivity claims, particularly in the public sector, um, that essentially says there are recurrent faults in those methodologies that are potentially overestimating the benefits of those technologies. And then looking at the other side, um, in terms of the oh, and sorry, the other thing I should mention there briefly is jobs.

Are. I would, uh. We would, we would like Parliament to take a view on, um, I suppose. Where the benefit of those um of the investment is actually accruing. You have one off jobs that are created like constructions. You only need 50 to 100 people to run a full scale data centre on a permanent basis. Um, there are questionable statistics about the, uh, the sort of the onward, um, jobs that are created by, by data centres.

Um, and then on the other side, transparency around energy use around water use, um, and around sort of pollution and other effects that can occur. I'll stop there because.
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None Portrait Speaker 2
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If I might. Thank you. Um, I think in our view, um there is one major technical reason that is driving demand and that is the reason that we're talking about, um, sort of data centers today. And that is the advent of general purpose AI, the type of workload that is being demanded of a data center is an order of magnitude larger and more complex than, uh, maintaining cloud services, web, that kind of stuff. Um, so if you look at, for example, D six projected figures by 20, 36GW of power, um, of the asked of the UK grid by 2030, that is uh, significant scaling up.

Um that is due to the fact that precisely the kind of work that the maths that you're doing on, on these things and accordingly, the types of data centers that are being proposed now are much, much larger. There are, they are a different beast to the kind that, for example, Ireland saw a growth in over the 20 tens. Um, and I think those there's a sort of set of technical reasons there, but it's also helpful to, to sort of talk about the political and strategic reasons why that there is this growth.

So you have the tech sovereignty debate, um, which another committee of this House, um, sort of opined on earlier in the week, but essentially this idea that the UK is going to want its own sovereign AI compute, um, the UK AI hardware plan released earlier in the week said we face increasing concentration of supply, intensifying geopolitical competition and growing vulnerability in the critical technologies that power modern economies. So that's the government's view. Um, it's also a bit of a sort of strategic stake, um, that the UK wants to have in the future.

Economy Minister Narayan uh, put this in Feb as we need greater British technology ownership before we can demand deeper British technology influence. Um, there is a bet being made about what kind of AI is going to be useful in future. Um, the, the sort of the AI growth zones and the AI opportunities plan, uh, sort of assume a strategy of investment in frontier AI, general purpose systems and a future of sort of agentic and multi-agent systems. Um, there is the desire to sort of reform and improve public services.

Um, the opportunity plan envisions quite a lot of tie in between public sector transformation and the investment in compute. And then, um, sort of the desire to secure economic growth. Data centers are powering a large amount of the growth that the US is seeing at the moment. Um, and reporting and um, some of that is imagined to be beneficial here. Um, and the last reason is this sort of question of fear of missing out, um, a sense that, uh. Um.

One data center builder on Monday claimed that 8 billion investment in the UK that they're making to data centers will unlock 35 billion in productivity gains. Those are marketing claims, but they are materially affecting how UK policy makers are making the trade offs that I talked about earlier.
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None Portrait Speaker 2
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There was a report launched yesterday, last night in the Palace, um called the UK AI compass, um, which is a piece of public attitudes, work that looks very closely at the um the. Range of public attitudes in the UK about AI and a very powerful theme that comes out in that work and comes in, comes out in Ada's own public attitudes. Research is a sense of disempowerment, uh, among people, um, and a sense that AI is not being developed necessarily in their interests. And, uh, evidently you may well have trade offs between the national interest and the local interest.

In many cases, that is a feature of the planning system. Um, but um. Presently, um. I think it's very instructive to look at the examples of the US and the examples of Ireland and their experience with data centre constructions, which um have been much more a feature of their political landscape than ours. And you are currently seeing um, uh, organized resistance to the construction of, of data centres you're seeing, um. A concerns about how. Both the literal environmental impact of those data centres and the, um, the sort of system costs of those that are being pushed onto consumers, for example, through higher energy prices are affecting support for those data centres.

Um, I think having um clear. Transparent decision making made on good data about those trade offs and having a link between. That data centre and the community, for example, through waste heat management, for example, through um purchase agreements that, that involve, uh, that data centre investing in, in that local community in some way, which is being discussed, you know, is, is a feature of some of the discussions that are occurring between, between some data centre bids in their areas are ways of managing those trade offs, making people feel included in, in that discussion.

Um, and making them trust that it will actually lead to some benefit for them. Thank you.
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None Portrait Speaker 7
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Thank you.
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None Portrait Speaker 3
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What I can talk about from my perspective is what we do as a company to make sure that we are not putting any burden on the environment. We have a very comprehensive sustainability strategy, which is guided by our North Star goal to be net zero carbon by 2040. And I can walk you through what our carbon free energy and energy efficiency in terms of what we do. And maybe I'll start with water. So when we talk about water, it's important to, to, to talk about why we use water.

We use water to cool our servers. And in the UK, we don't rely on water. 97% of the year. So we only use water 3% of the year, which is when we need it to cool down the outside air so that our servers can be more energy efficient. There is a commitment that we've made to be water positive. By 2030. We're 53% on the way. And there is also a metric which is showcasing how efficiently an operator is using water, the so-called water usage effectiveness.

And we have across our European operations, a 0.04. Just to put this into context, the industry has taken has taken goals through the climate Data Centre pact, and there. The commitment is to meet 0.4 by 2030. Um so these are some of the features that we do on water. We whenever we go beyond our efficiency, we also try to replenish water. We have with Rivers Trust a collaboration where we will be giving back 800,000,000l to the community and to contribute to the River Kennet, and also the River Thames and the Thames Basin.

So we have a basin approach where we look into it. And beyond that, whenever possible, we want to use industrial reuse water, which is also an area where we're looking forward to see a framework potentially in the future, where utilities will be incentivized to provide and make make such industrial water available. Pivoting to carbon free energy. We are Europe's and UK's largest corporate buyer of carbon free energy, and the globally, we're one of the leading buyers and we. Again, as I've said, net zero carbon by 2040 goal.

We have 700 projects over 40GW of capacity that we have contracted in the UK. We have 40 projects and which is the equivalent of up to 850 000 UK households. Um, and just to name two of these, one is in Moray West and Scotland and the other one is in Colehill in Northern Ireland. So two projects where we are adding net new capacity into the UK grid, which is benefiting not only our data centres but also businesses and, and public sector etc.. But everything comes to the point that we try to not use much energy.

So the greenest electron is the one that we don't use. This is one of the principles we abide by as a company. And as I mentioned before, we've done a study, uh, which showcased that AWS data centres can be up to 4.1 times more efficient compared to on premise data centres. There is a measure which is showcasing data centre efficiency, PUE. So power usage effectiveness and our PUE globally is 1.15. At the European level. 1.11.

And just to put it into context, the average of the industry is between 1.5 to 1.6. The new data centre design that we announced.
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None Portrait Speaker 3
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Average industry. Um, and our new data centre design can meet up to a 1.08 uh of power usage effectiveness. We're not stopping here. We're recognising that AI will need more power. This is why our new data centre components are designed in a way that they can reduce mechanical energy by up to 46%. And we have also the newest generation of AI chips, so-called Trainium three chips, which have a four times greater energy efficiency and compute performance to support, uh, that compute per watt that is produced in a data centre.

We also operate under the context of a global energy management system, the so-called ISO 50,001, which is centralizing and standardizing our approach to energy efficiency across our operations. Now, all of these things are important, but especially when we consider, what cloud can actually bring in terms of efficiency. And I think there are two figures I would like to to share from the IAEA report, 1 in 2026 and 1 in 2025. So the IAEA in April found that if scaled AI technologies across the energy sector have the ability to reduce energy use at 13.5 x joules, this is the annual consumption of a country like Indonesia.

And Indonesia has 280 million of inhabitants. This is one figure, and the second figure is from last year. The IEA estimated that if AI technologies, if not scaled more than what we have available today, are integrated across the energy sector, they can save CO2 reductions up to three times larger than the total data center emissions by that time in 2035. So I think when we're having this discussion, it's important to look at what data centers should be doing, as I've evidenced.
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None Portrait Speaker 3
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If the energy sector.
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None Portrait Speaker 2
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Sure. Um. Thank you. Um, so I think um the there are three major areas of, if you like direct effect, which is power, water and, um, uh. Sort of direct pollution. Um, I think just to address some of the, um, sort of, some of the claims being made, um, the scale of the, um. Sort of pressure on the grid that is envisioned by the growth, which is I think a four fold increase by 2030, which is only five years away, is such that even if a single data centre, um, developer.

Uh. Has a net zero strategy, you push elastic demand that doesn't care about whether it's green or not into fossil fuels and other non-renewables. So the, the, the net effect on, um. The UK's for example, net zero targets is still damaging. Um, a. Thing that, that it's helpful to, to, to think about is um, exactly when demand happens, data centres firstly are not like other forms of, uh, sort of energy grid consumer. Um, they are often much more constantly on, um, they, the workloads are scheduled across them so that if you're doing inference, that's kind of something that so people running queries on AI, you need to be constantly available with low latency.

If you're training a model, maybe you'll do it at night when the energy is, is, is cheaper. But that still effectively means that that data centre is constantly pulling on the grid. In terms of that, um, sort of those figures, like we only use um, water 3% of the year. It matters when that happens. So if that is happening at a time when that area is already experiencing water stress because of very high temperatures. Which is exactly when everything might be getting hot, then you're going to be increasing water stress at a time of critical water stress for that that area.

Um, another thing that's worth, um, sort of disambiguating is, um, some of these figures like, um, water positivity, water neutrality, um, those are often do not measure exactly what you think they're measuring. They um, are when you hear. Claims in the US in particular about water neutrality, you have reports of communities saying this water is being taken from one place and being put back in the other, and still being counted as water neutral. So it is not necessarily an accurate proxy of water stress avoided.

Um. And then I suppose the, the, the other thing that would be worth talking about is, um, behavior that happens sort of behind the grid, behind the meter rather as it's called, which is, um, in order to, um, this, this, um. Is true across the industry. I'm not making any claims about any particular developer, but um, in order to serve the energy requirements and the ability to sort of delays of getting on the grid, many developers are countenancing private energy generation, often using natural gas, which obviously has sort of knock on effects for the UK's net zero target.

So, um, that is all to say there's, there's sort of all of those concerns. And then there is a, I suppose, a separate concern, which is. Will the protections that are supposed to kick in and consider all of those impacts actually kick in and bite. And um, there are a number of reasons from, for example, the Buckinghamshire data centre example, which the committee might be familiar with, um, that, uh. The. Policy levers the government is pulling in order to make this stuff happen quickly means that some of those, um, impacts are being skipped or the sort of the information that policy makers are making those decisions on is not complete.
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None Portrait Speaker 8
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Thank you very much.
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None Portrait Speaker 2
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That's right.
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None Portrait Speaker 9
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Yeah.
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None Portrait Speaker 2
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Um, so to be clear, um. I. I was referencing those productivity claims, but I think referring to them as claims with, with questionable methodologies behind them. Um. I think the link between a data centre being built in a location and the benefit of that data centre, um, being felt in that local area or even nationally is not automatic and needs to be designed for. And you can design for that with um. Commercial incentives requirements using procurement levers, um, to, uh, create a relationship between um, a data centre and its area or a data centre and the kind of work that happens on that or the efficiency of the work that needs to happen on that.

If you're concerned about environmental outcomes. But, um, I think the, there is, there is not a clear theory of change that says you plonk a data centre down in some bit of the UK and that necessarily generates value for UK businesses. Uh. One sort of shorthand for that, for example, is when you see a large announcement of a data centre investment, um, probably about half of that is going straight out the door on chips. So it's not unless those chips are being bought domestically, that benefit is not being not recirculating in the UK economy.

Um, and there were some messages in the AI hardware strategy earlier in the week that sort of suggested that the government may be beginning to prioritise, um, sort of the domestic value chain, um which would be very positive if they realised, but there is a tension between um the. Political. Well the geopolitical competition for having these data centres built in a particular location and the ability to insist on terms with the developers.
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None Portrait Speaker 3
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Yeah. Happy to build on the points that I made before. So I spoke before about water, energy and carbon free energy, which are three of the areas that of course, always are top of mind whenever we are planning, building and designing a data centre, I can talk to a few other areas around operational sustainability. So of course, whenever we are planning to develop a data centre, we're trying to be a good citizen. We engage proactively with the community to understand the needs, to make sure that there is, um, ongoing feedback about how we can be a good citizen, and neighbor in that community.

So for instance, just to give you a couple of examples on noise, uh, there are design features like acoustic enclosures, low noise equipment, and we're not managing these issues afterwards. We have it in the DNA of our design. Um, and there are also planning boundaries, periodic monitoring, and there are ongoing compliance checks, biodiversity. As a next area, we follow mitigation hierarchy when it comes to biodiversity. So avoid minimize restore biodiversity impacts. And this applies across all our UK facilities.

We are also compliant with Environment Act from 2021 to achieve a 10% of biodiversity net gain and whenever feasible, and there is also a viable grid connection because we need to meet customer demand. We are also um building data centres on brownfield sites. And we're trying to make sure that we're adding value to that site and that area. Maybe another area, broadly speaking, that we're focusing on. So we have design principles, reuse, repair and recycle designed to for as long use as possible, repair and then recycle.

We have a European facility to recycle to test and repair equipment and then recycle in Dublin. And recently we, uh, diverted 23.5 million components from landfill. So they were either result, uh, in the secondary market or recycled. So there are a series of actions that we try to undertake. And of course, our responsibility doesn't stop there. We're also trying to make sure that we're building a next generation of, uh, data center professionals that can find a job in our community.

Just to give you one example we created last year the UK's first data centre apprenticeship, where the next generation of new people can actually learn what it means to be a working in the data centre operations. And we also committed to training 100,000 people in high skills by 2030.
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None Portrait Speaker 2
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Thank you. So, um, I suppose it might be useful to look at the example of Buckinghamshire here. Um. The government has AI growth zone initiative. Part of that initiative, as established in the city's plan is to um. Help fast track um data centre proposals through things like environmental impact assessments through habitat planning. In that example, um the government, um, sort of, uh. Called a decision in and then um, admitted a, I think serious, um.

I'm forgetting the exact quote now, but a serious logical misjudgment. Um, in the assumption that no environmental impact assessment was required. What that means in practice is that, um, decision makers are not necessarily asking for or being given or have access to the detailed environmental information that they will need in order to make good decisions about those data centres. Um, and then there's, there's that sort of individual planning level decision, but there is also the sort of system level question. Um, it was reported, um, about a month back, I think in the Guardian that um there were serious disparities between de cits um estimations of future energy demand and designates and um.

What good planning would look like at the system level is all bits of government having a single accurate picture of um projected demand on the system based on um real. World proposals that are going through, not simply say the local authority, um doing that or the minister looking at a single um called in planning decision.
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None Portrait Speaker 9
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You've outlined as far as the building and the operation of the um data centers, how you, you try to build in sustainability. Can I just take you to the point before you ever reach that decision?And it's really provoked by, um, something which was, uh, I. Visit I had during the recess where for?Obviously governments and authorities are keen to locate these data centres for all the reasons that you've given. And sometimes in doing that, um, maybe the sustainability or indeed the environmental impacts are not thought through.

Totally. I'm thinking of one where there's currently a planning proposal for a. Wind farm in the sperrins in the in the west of Northern Ireland. Beautiful untouched upland peat bog, um. The the area itself is an area of natural beauty, etc. the wind farm will be designed to drive the power for um data. Centres proposed in the North east west of Northern Ireland. And there's a big economic demand for them etc. um it will involve um quite a lot.

Of disruption to actually transfer the power once it's been um generated. To where the data centres would be, it will involve quarter of a million metric tons of peat being removed from pristine bog. Now it comes to making an application, the authorities may well say to you, we'll provide electricity, to the data centre providers in their desire for sustainability. Ever ask the questions behind that?Not just that, yes, you can provide the power for us, but how is that power going to be provided?What are the environmental implications of that going to be and the social implications of that going to be?Um, in terms of the power which we will require, um, to locate in that particular locality, uh, I mean, you may argue that that's well, that's the responsibility of the authorities who are going to give the planning permissions, etc..

But do you ever ask those questions?What, even if the authorities are happy for us to come here, what are the consequences of our locating at this and making demands for either power or water?Yeah.
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None Portrait Speaker 10
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Um, yeah.
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None Portrait Speaker 2
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Um, very quickly, I mean, I think that. I think fundamentally at the bottom of the question was something about incentives. And there isn't an effective commercial legal incentive for a company to take those things into account when they're being reassured that power will be there outside of the security of that power supply and its reliability. Um, and other than passing the environmental impact assessment, which may be a process that they are, um, that is sort of, um. Being completed through a fast track process, to put it generously.

Um, and then I think the, the wider question is, um. There is a. Um. A lack of alignment on the incentives and, or the ownership for outcomes that is held across other bits of the public sector. So, um, the local authority, um, the, the grid, um, the, uh. Sort of national planning in dizziness and sit in treasury for the productivity gains. There isn't really a vehicle for alignment across all of those things to understand whether where benefit is going to be generated and whether or not it's the right trade off to make.

One, um, sort of strange place in which that, that, that lack of alignment, incentives, planning manifests is that the, there is, there's currently a disconnection between the sort of priority you get in the grid queue and who can apply for that. And land ownership and planning permission. So you have situations in which some developers are sitting on land that is good for a data centre, and a different developer is ahead of them in the queue for a grid connection for that land that they don't own, which again, shows you this sort of misalignment of incentives.

And it's very difficult to plan for good. Uh, societal and local level outcomes with. Those disconnections happening.
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None Portrait Speaker 10
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Yeah.
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None Portrait Speaker 4
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Why not. Um so on the the employment issue, I struggle to comment, uh, because I don't run a data centre. Um, I can only comment on what I've seen. I visit our two, two, three sites. Um, and there are a lot of people working there. There's cleaning staff, security staff, there is a, an environment there that requires people and jobs, some very skilled jobs as well. Um, so there is an employment, whether or not that competes to a, I think someone says an Asda or something like that earlier.

Um, I'm not sure. Um, but there is, it certainly is an employer in, in that community and they are some highly skilled jobs that um, the UK requires. Um. What that demand looks like though difficult, um from the public sector. It's, it has been constant for us um at the minute, but it's all dependent. And again, this is only for our framework is it's very dependent on um the government's drive at the time, um, when the crown hosting was brought into place, there was a big push, um, cloud first policy and all that good stuff.

Um, we were named in that there was a, a drive and there was a big take up and our trend towards us climbed massively. That has once they died off, it's just plateaued a little. Um, yet when we look at the data that the likes of Defra gather questionable whether or not it's right, not Defra's fault, they're given information by other entities. Um, there's a lot of, um. Public sector entities that have got those broom cupboard data centres that are highly inefficient.

They're burning power. Like there isn't a requirement to um, if they were to move into a, a highly efficient data centre that are offered by multiple people. Um, there would be a vast saving on efficiency, power costs, carbon water usage and all that good stuff. Um, but our, yeah, we're driven by um, I guess. Yourself, um, if you push it, entities do come to us and we can make things better. Hopefully.
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None Portrait Speaker 2
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Thank you. Um, so I suppose I'd, I'd point in in two places on the question of jobs and growth. As I said before, there's, um, there's a bunch of construction jobs, significant but temporary 50 to 100 people for your average data centre to actually run it on a permanent basis, um, often quite highly skilled. So may or may not be sort of sourced locally. And then, um, a lot of, I think they're referred to as imputed jobs. So what imputed or inferred jobs.

So, so what, what happens further down the value chain. The data centre existing lets you sort of create. Um, I think what I would encourage the committee to test is the assumptions that sit under those, the often they often use sort of fairly simplistic calculations, multipliers that essentially say, oh, we're going to guess this is going to create six times as many jobs as the data centre runs. Um, and that is the number worth probably pressing on. Um, secondly, just to describe a little bit about you were asking about sort of AI and public services and sort of what's driving sort of sort of demand and use there and growth.

Um, it's worth distinguishing between narrow AI and general purpose AI. So narrow AI is, um, something that looks at cancer scans. It's very, very specialised. It does not use it or uses an order. Of magnitude less compute than, uh, speaking to a chatbot. Often the type of benefit that you see talked about. But it is, it is sort of not what's driving the big system demand here. Um, there are, there is quite a lot of.

If you like, the strategy to date has been across central government, give everyone a chat bot and see if they can become more productive. Then you have some organic adoption, if you like, at the coalface, you have ambient voice translation is very popular with doctors at the moment and sort of seeing wide uptake across the NHS. Um, that again is narrow AI. It's a small, small model. Um, and then you sort of see this sort of frontier of system transformation. So in the NHS, for example, they're very actively looking at whether they can build in agents multi-agent systems into the way the NHS works and whether that can improve how the system works.

That does involve polling effectively, a large language model to say, okay, we've had this text in. What does it mean?What's the response that does create that kind of system load?And so as, um. The sort of front line of public services starts and the stuff that happens behind the scenes starts to adopt Agentic in particular, you can expect to see that demand go up and that dependence. You.
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None Portrait Speaker 12
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Thanks. So I think sort of first of all, it's worth making the point that the sector, both itself and its end customers are absolutely committed to sustainable data centre build and operation. And there are, as you heard on the first panel, a number of of trade offs when it comes to, uh, these. But there are also, importantly, a number of mitigations. I think that it's important to bear in mind. So there is loosely a trade off between water and energy use that is actually narrowing over time, particularly as we get to more advanced cooling technologies.

But there is that trade off. And certainly, uh, you know, in some areas it makes sense maybe to use more water, you might guess from the accent that, uh, I'm from one of those areas that it may sometimes make sense to use water if there's a, an energy challenge with grid connection. But broadly, we are moving away from water as a form of, of cooling. Data centers are energy intensive, but that has, uh, benefits as well as challenges, uh, industrial energy demand in the UK is actually falling and has been for a number of years.

Obviously, as the grid itself is changing and is decentralizing as we move to a renewable future. That brings grid costs. And with industrial demand falling, a lot of those costs could start to accrue to individual households. So actually, as data centres bring demand to the grid, they can potentially offset some of those grid costs by by ultimately paying for them. And they also, as you heard from the first panel, underpin a lot of renewable energy generation. So there's one example, um, of the, I believe it's the West Murray wind farm off the coast of Scotland came online, uh, last year.

It's an 800 megawatt, uh. Uh, renewable farm. And about 60% of that is underpinned by power purchase agreements to the data centre sector. So, you know, bringing additional resource to the grid. Um, I think I'll leave it there for sort of opening remarks, but happy to go into any of that detail as well.
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None Portrait Speaker 10
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I think it's extremely important to, to look at this in the round and economy wide. We've seen escalating estimates of how much demand data centers are bringing almost every couple of months. There's a new estimate. And so the energy system operator put out some figures in 2022 just ahead of the kind of boom in generative AI. Um as to total energy demand, they expected from data centers out to 2050. And when they revise those figures three years later, it had doubled.

That figure that they put out now looks like the equivalent of the entire commercial sector today, roughly a quarter of the entire electricity that the UK currently uses. Has been mentioned already on the, in the previous panel. Um we have quite worrying discrepancy in terms of figures coming out of government. Um and earlier this year Ofgem asked for people seeking a grid connection to come forward and 140 data centres came forward. And that equated to 50GW of demand, which is slightly more than the entire UK demand on the peak winter day this year.

In evidence to this committee, the government will have said that figure might actually be 50 to 70GW, i.e. an additional 40%. And these are enormous figures. Um, and we know that the, the government faces a big challenge already in electrifying heating and transport in order that we can decarbonise our economy. Um, and doing that is going to require a doubling of electricity. So the idea that, that we can load on another doubling of electricity without there being, um, fossil fuel generation going into the mix seems very far fetched to us.

The reality is that the pace of data center growth is far outstripping the pace of renewables deployment. And that means that we will stimulate more fossil fuel generation. And the final thing I'd add is.
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None Portrait Speaker 1
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50 to 70.
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None Portrait Speaker 1
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Okay, great.
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None Portrait Speaker 11
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And so effectively what you're looking at is you're comparing the power to power, the compute. So, so working the chips and that power consumption around the power to operate the building. So, so the cooling effectively and management of the data centre. And so that's the ratio. The one is the compute and the 0.2 up to zero point however far you go, is that the power to run the building. And we can all for particularly for new data centres.

And that's let's face it, we're focusing on new data centres because the legacy data centres are already built, right. So you're not really changing them any time soon. So for new data centres, of course you can demand a good PUE and all of the hyperscale customers would already demand that of us. Um the focus should really be on the one. So the power to compute and the advances in the last decade have significantly improved that. So we're already seeing, you know, ten times more efficient compute.

And every single chip designer is working on improving that power efficiency yet again. So you will see improvements in designs from silicon onto photonics. Um, there are new sort of ways of overlaying logic, which means that this power consumption will go down. And so I think of course you can measure PUE, you can measure water usage effectiveness. And at pure, for example, we operate closed loop systems. So so we never use adiabatic cooling. So for all of our new data centers going forward, there is no running water.

So you know of course you can measure w e but I don't think that's necessarily a requirement for modern data centers.
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None Portrait Speaker 11
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So I think any good data centre operator will always be thinking about the environmental benefits and community benefits of the data centers they're building. So if I look at, for example, our scheme in Brent for Pure Data Centres group, we work very closely with the local community to ensure that the facility we were putting up actually added to the community. So from a biodiversity perspective, that building is going to be, um, enrobed in one of the largest living walls in the world to have the impact of taking and absorbing pollutants out of one of the most polluted parts of the country where somebody had a pollution as a cause of death.

So, so actually, from a community perspective, it's really additional to the community. So, so I think, you know, we should expect developers to, to be very ethical and very considerate in the way they develop. But, but let's be clear, we won't be getting, I don't think, massive data centres built in the UK because all of my customers are only looking at growing organically in the UK. So for the compute demands that are needed for the customers that are already here, so the banking sector and so on.

So organic growth is required, but large scale AI data centres will not be built because it's too expensive that the power of compute to pick up on the example that Matt was using for 100 megawatt data centre operationally for the cost of power, it's a quarter of £1 billion more a year to operate it here. So my customers want me to build with pure data centres. Those facilities in the Nordics, for example, where the cost of power is much cheaper. So although there might be a very backed up system of applications, the majority of those are speculative.

And I don't believe that any any of my customers would want those built here because the facilities would be too expensive to run, and also they're too far away from a planning and consenting and access to power perspective. So, so I think, I think we can be as demanding as we choose to be. But the reality is that then those data centres won't be built here unless it's for organic growth. So so, you know, we need to measure up what it is we're seeking.

And be sure that we're asking for the right things to be built.
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None Portrait Speaker 2
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Yeah. Well, the final thing I wanted to add, um, is that clearly the grid connection and the grid queue is a problem for developers. And understandably, developers want to build as quickly as they as they can. Um, but that unfortunately is leading to inquiries about powering data centres with gas. And there have been reports in the press that more than 100 data centres have looked into or inquired about the availability of connections to the gas grid. Um, and in fact, we've seen the government give the go ahead to, um a development in Watts's Wood in, uh, near Beaconsfield, um, to say, yes, you can apply into the new nationally significant infrastructure, uh, projects program.

And that is a data centre. Clearly this is pre application. So I don't want to overstate, um, whether or not this is definitely going to happen, but that is the data centre that is saying we are not going to seek a grid connection. We are going to have 300MW of on site gas generation. Um and, and if that pattern starts to be replicated because data centres cannot connect quickly enough to the grid, then that provides even greater concern when it comes to emissions and our ability to, to reach net zero.

And I would also add that that provides serious concerns in terms of local air quality, because it's one thing to be connecting to a grid. If you're, a 300 megawatt data centre, it's quite another to be burning that that gas on site. Um, and I think local residents who are coming to us at Global Action Plan are equally concerned about the, the potential of air quality impacts from gas generation and also from the diesel backups. We've we've seen that as well.
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None Portrait Speaker 1
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Can I can.
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None Portrait Speaker 1
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Jonathan Davis.
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None Portrait Speaker 4
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Yeah.
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None Portrait Speaker 2
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Yeah, I think that's that's the nub of it really. And we, you know, we have carbon budgets and we have a carbon budget and growth delivery plan, which looks at how we will meet up to the sixth carbon budget. But we we know in the seventh carbon budget, there is no specific, uh, reckoning with, with, with data centres. And all we're hearing from, from ministers is that the growth is inherently uncertain. Um, and of course it is in one sense, we don't know exactly how many data centres there are going to be or how much demand there's going to be.

Um, but I think we urgently need two things. We need the national policy statement that was promised, uh, in November to be delivered within three months. And we still haven't got it. And that will set out, you know, how we look at cumulatively the planning applications that come through the the nsip process. Um, and more even on top of that, we need the government to look very carefully at how this growth will be absorbed within carbon budgets, because of course, carbon budgets are technology neutral.

They don't say you can only have this amount of. Wind or this amount or whatever. It's a budget. Um, but it is based in the reality of, of physics and emissions and the ceilings that we are committed to. And therefore, if data centre growth is going to push up emissions. Um, and the government decides that's what it wants to do, um, that's a legitimate choice, except it has to then show where the emissions are going to come down.

Um, and I think our concern at the moment is that with the kind of relaxation of planning rules and the, the express intention of the government to, to make it easier to, to build data centres here, um, there isn't a sense that somewhere else is being constrained in order to make it all add up and fit under the carbon budgets.
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None Portrait Speaker 2
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Yeah, I think, I think clearly, you know, a number of data centres are going to be built. And we know that about 90% of the energy that goes into data centres escapes as heat like that. So the best use possible of that heat is going to be a good thing. Um, and lots of, of communities are interested in how that waste heat could be used to drive, um district. Heating networks etc.. Um, but unfortunately that is sometimes being used as a kind of, as a reason to advocate for the construction of a data centre rather than looking at it as I would suggest the government ought to as kind of okay, when they're built, this is how we must make best use of them.

And, um, like I say, we have a worrying lack of clarity about what the overall plan is. We also have a lack of clarity about who the end users are. And there has been a little bit of discussion about that, both in the previous panel and on this. Um, but I think the industry would, would help itself if it was really transparent about who the ultimate end users of these data centres were, because in the planning applications, we look at, um, and the questions we ask, um, it's never disclosed.

Um, and for the local residents who are concerned about the construction of these data centres, that matters because if the end user is going to be a university that's looking to crack an intractable medical problem, um, they will feel. Very differently about it than if it is generative AI that is at the benign end, just generating pointless videos or at the more destructive end, doing some of the things that, you know, for instance, we saw at the beginning of the year with grok enabling the notification of teens. Um, so transparency from the industry is, is critically important and asking those questions, I think is an important job that the government can do.

We did ask them, do you know, do you have a list of all of the clients of the of the data centres up and running?And they said, no.
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None Portrait Speaker 1
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I'd love to.
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None Portrait Speaker 2
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Explore this.
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None Portrait Speaker 10
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Mr. Evans.
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None Portrait Speaker 10
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Okay.
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None Portrait Speaker 2
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I think that in AI growth zones are. Are what they sound like. They are an attempt to generate. Greater capacity of of AI and data centers in specific places. And we have also seen, you know, an attempt to kind of change the way that planning is, is pursued in those, in those growth zones. So in, in Oxfordshire, it looks like the groundwork is being laid for, for, again, local development orders to be, to be pursued. And I think I can see that the, the government's logic, if we want to streamline this, this process, if that's what the government is setting out to do, um, I would only caution that, you know, everywhere that major proposals are going in, uh, local residents are getting very concerned and are feeling like they are not participating and not able to participate in that planning process and not able to have their voices heard.

And that there is a sense that this is being done to them centrally and not involving them. And I think that is a big risk for government. And we've seen very similar approaches. If we look back ten, 15 years to the attempt to kind of get the fracking industry going in this country, I would say there are a lot of similarities there. Um, that ultimately, you know, local people didn't feel like this was for them and it's been mentioned already. But, but the jobs benefits really don't seem to be what the, the developers are claiming.

And, um, you know, the data center I've mentioned already in Blyth, Northumberland, but. Lots of press releases out and repeated in local media that this would lead to 4000 jobs and the slightest bit of interrogation drew an admission that this would actually be a hundred jobs. And this is a £10 billion investment in Blythe. It's enormous, which means you're getting one job for every £100 million. So I think there needs to be real interrogation of what this means for the people living in AI growth zones.

And, and less of a, of a kind of laissez faire approach.
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None Portrait Speaker 4
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Yeah. I think just to briefly come in on that, completely understand the government's intent. Here we are in a moment in time, in capital investment in data center and compute buildout, right?This, you know, the amount of CapEx being spent globally will not be the new normal. One expects it to be. So it is, in our view, right for the government to try to capture as much of that in a sustainable way as possible. And we've seen significant capital investment announced over the last couple of years in the UK, in compute infrastructure, I think on jobs it is challenging in terms of you can either say that the data centre employs the exact number of people that it employs, which is the sort of direct employment, or you can say it underpins the entirety of our digital economy, which is sort of everyone.

It is quite hard to then sort of narrow that down to a sensible middle, um, tech UK did a piece of work on this, uh, two years ago. We believe we employ about 44,500 people across the UK in the data centre sector. That is across all sort of 600, 650 of those sites. They are well paid jobs. You know, this is highly technical, often high voltage electrical engineers, um, all of those are above the UK median, uh, wage. Bracket.

Um but an individual data centre will employ a relatively small number of people depending on its size. And if you're at the very edge of a data centre, it might employ no people, but it does underpin everything that we do in our lives ultimately.
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