Data Centres: Energy Demand

Lord Whitehead Excerpts

Thursday 16th April 2026 Lords Chamber

[Earl Russell]

To ask His Majesty’s Government what steps they are taking to ensure that projected increases in energy demand from data centres do not compromise the achievement of their targets for clean power by 2030 and for net zero by 2050.

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, the Government recognise that Great British electricity demand is expected to grow significantly, driven in part by advances in AI. We are clear that this growth must not prevent delivery of clean power by 2030 and net zero by 2050. The Government are working to ensure data centre energy demand supports a flexible, resilient and increasingly low-carbon electricity system, including through smarter siting, improved use of existing clean generation and more efficient use of power. Importantly, evidence has shown that AI will support emissions reduction across the economy through improved efficiency and system optimisation, potentially outweighing additional electricity demand.

[Earl Russell (LD)]

My Lords, with Ofgem warning that proposed data centres are seeking 50 gigawatts, exceeding our current peak demand, my view is that, as yet, inadequate assessments have been made by government and regulators of AI’s climate impacts. Does the Minister agree that it is unacceptable merely to believe that this demand is compatible with clean power and our net-zero targets? I ask the Minister to commit to a NESO standing forecast for AI’s electricity use and to ongoing direct contact between government and the Climate Change Committee on data centres.

[Lord Whitehead (Lab)]

I completely agree with the noble Earl that merely believing that it is all going to be okay and that we can easily absorb all these additional demands on the energy sector without doing anything else is, at least, a folly. That is why the Government are taking substantial steps, for example through the AI growth zones, to make sure that we plan where data centres will be and make sure that those data centres are as closely aligned as possible with sources of either optimised electricity or constrained electricity or with new sources of energy production, so that the AI data centre development is not a burden on the system but an addition to it.

[Lord Geddes (Con)]

My Lords, remounting my favourite hobby horse, can I ask: when will the Government give increased support for tidal power, which, unlike wind and solar, never runs out?

[Lord Whitehead (Lab)]

I welcome that question from the noble Lord. This is an issue that is quite close to my heart, and I recently visited the Liverpool tidal barrage scheme to see how it is doing. I personally am committed to developing tidal power, both tidal stream and tidal range, but there is still some way to go in working out how that can be value for money and can be supported through various longer-term methods of support because of the long life that tidal range in particular has in front of it.

[Lord Wigley (PC)]

My Lords, does the Minister accept that the most economic way of meeting such peak demand from clean sources is rapidly to accelerate the programme for building hydro pump storage schemes? There are a number that are ready to go in Wales and Scotland. They are clearly economic, using electricity generated cheaply at night to augment peak availability, so please, please, please will the Government get on with it?

[Lord Whitehead (Lab)]

I agree with the noble Lord that pumped hydro schemes are one method of ensuring that electricity is used as efficiently as it can be in terms of taking it in at some stages of the cycle and releasing it at others. A number of other arrangements can do that, such as batteries and other forms of long-term storage—compressed air, for example—all of which will be a substantial part of the battery of systems to optimise the electricity production of the country as AI develops.

[Lord Alton of Liverpool (CB)]

My Lords, when the Minister last answered on this question, he was good enough to talk about the problem of using Uyghur slave labour in the manufacture of solar panels. He promised to write to me, and I am grateful to him for following up that promise. In that letter, he said that he would inform the Joint Committee on Human Rights by July of the measures that Great British Energy is taking to eliminate the use of slave labour. Will he comment on what he said about the need for a review of the 2015 modern slavery legislation that the noble Baroness, Lady May, who introduced that legislation, has called for, not least Section 56 of the 2015 Act, and how he intends the review of that legislation, which he mentions in the letter, to take place?

[Lord Whitehead (Lab)]

I have a feeling that the noble Lord will shortly be in receipt of a further letter from me on this subject. It is the case that the Modern Slavery Act, particularly in terms of a number of the concerns that have been raised about the more offset arrangements as far as modern slavery is concerned, needs some uprating. That is being considered, but as to some of his further points, I think I will need to write to him further.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, will my noble friend confirm that new nuclear is important, in terms of both data centres and our clean energy programme? Will he confirm that the only way we can get new nuclear at places such as Hunterston in East Lothian, where we currently have a nuclear power station, which is much needed in Scotland, is if on 7 May we get rid of the incompetent SNP Administration?

[Lord Whitehead (Lab)]

I have lots of reasons to agree with my noble friend about particular Administrations and how they might be replaced. As far as the future of AI nuclear is concerned, it is certainly the case that new nuclear can sit very well alongside, for example, AI growth zones. One example of that is the Wylfa area, where the contract for a new SMR has just been signed, which will also be an AI growth zone where a number of data centres can establish themselves and directly use the power coming from that new SMR on that site.

[Lord Moynihan (Con)]

My Lords, given that the environmental footprint is rightly central to the Government’s net zero policy, what is their reason for not opening the North Sea to a new licence round tied to long-term take-or-pay contracts to power new data centres, for example, when the average carbon intensity of the North Sea is 24 kilograms per barrel of oil, Jackdaw is 8 and imported LNG from the United States is 85 kilograms of carbon intensity? What is the Government’s rationale for not developing our own reserves rather than importing LNG, at the expense of energy security, with an environmental impact four times more polluting than developing our reserves in the North Sea?

[Lord Whitehead (Lab)]

I am afraid the noble Lord is back on his fairly standard topic. As far as AI is concerned, we ought to bear in mind that clean power already represents 73.7% of GB electricity generation and we are targeting clean power providing at least 95% of that power by 2030 or so. Importing a lot more gas to deal with the introduction of AI does not necessarily follow, because it is really a question of using that clean power in the most optimised way possible to make sure that AI is supported, so his thesis does not quite stack up.

[Baroness Sheehan (LD)]

My Lords, what requirements will be put in place to ensure that energy efficiency and waste heat recovery measures are implemented?

--- Later in debate ---

[Lord Whitehead (Lab)]

The noble Baroness mentions waste heat and electricity waste, and that is precisely the sort of area that needs to be optimised in terms of making sure that we can deal with this growth in AI without building huge new resources. It is by optimising the system that we can get quite a lot of this new requirement over the line. For example, the introduction—interestingly, using AI—of dynamic line rating allows cables to work at a much higher rate much closer to their thermal capacity because of the ability of AI to predict what that line is going to do as opposed to the lower rating that they are on at the moment. That could produce up to a 50% gain in capacity for those lines. The same goes with a lot of things concerning waste heat.