UK data centres will create only 25% of the 40,000 jobs forecast by the tech industry, according to a report by environmental thinktank Verdant.
The 40,000 figure was originally produced by trade body techUK, and while it is occasionally cited by the UK Government as a justification for ramping up AI investment, Verdant argues that the prediction was based on “an extrapolation from older aggregate figures” that neglects the shift to bigger gigafactories.
Instead, the thinktank has used public records, planning applications and press releases to arrive at what it argues is “a more realistic estimate” for permanent UK data centre jobs by 2035.
This estimate is 10,400, and while it may potentially weaken the tech industry’s argument that the UK should accelerate its data centre buildout, a separate report from Burges Salmon indicates that this buildout may encounter other serious problems.
In this case, Burges Salmon and numerous co-authors, including CoreWeave, NTT Global Data Centers and Floral Energy, warn that building more data centres in Britain could be restricted by energy availability.
Report suggests there’s no real jobs case for data centre buildout #
Verdant’s report also disputes techUK’s estimate of the people working full-time at data centres already operational in the UK.
In contrast to the trade body’s claims of 24,300 jobs in existing facilities, Verdant reveals that the evidence it consulted would indicate only 4,400 permanent positions.
In its analysis, the thinktank used the same ‘jobs per megawatt’ metric techUK used to reach its earlier estimate.
However, in matching employment to capacity for proposed facilities, Verdant concluded that planned data centres would provide only 1.6 jobs per megawatt of capacity, whereas techUK previously arrived at a more optimistic 8.5 jobs per MW.
The trade body has also claimed that existing data centres provide 47.3 jobs per MW, while Verdant argues that a more accurate figure for the current pool is 8.6 jobs per MW.
The thinktank also notes that this falls far short of the jobs created by steelwork facilities (291), car factories (400), hospitals and medical centres (3,626), and schools or universities (4,534).
Based on such calculations, its report concludes that the “jobs case for data centres collapses.”
It also concludes that, given the UK’s constrained supply of energy and water, there should be “a on resource-intensive constructions” until stronger regulations can be introduced, and until a better (non-jobs-based) case is made for data centre development.
A spokesperson for techUK has said that its forecasts were based on “the best available industry data at the time” and that they remain “a reasonable estimate” of industry employment, while the UK Government has disagreed more categorically with Verdant’s report.
“This report relies on a deeply misleading jobs-per-megawatt metric, makes false comparisons with hospitals and schools, and appears to confuse electricity capacity with actual consumption,” a government spokesperson said. “More seriously, it discounts the wider economic value of compute and the national security and sovereignty case for building critical digital infrastructure in Britain.”
Power is the industry’s ‘central investment risk’ #
While the UK’s government and tech sector may take issue with Verdant’s conclusion, the thinktank’s mention of Britain’s energy issues is salient, in that these issues are also the subject of a separate report by corporate legal firm Burges Salmon. In collaboration with CoreWeave, NTT Global Data Centers, Future Growth Capital, Floral Energy and Savills, the law firm concludes that power constraints represent the main risk facing the data centre industry.
“It is the central investment risk, the primary determinant of site value and the gating factor for project financing,” the report states.
It also notes that, on average, it takes a 50MW facility seven years to secure a grid connection, whereas this is only four years in Northern Virginia, which is currently the world’s largest market for data centres.
The authors warn that it may also be difficult to supply planned data centres with sufficient energy, given that peak electricity demand is forecast to increase “materially” in the coming years.
“Combined with the UK’s electricity networks and generation mix, this means that ensuring there is sufficient generation, transmission and generation capacity to get electricity to the places it is needed at all times, whilst maintaining security of supply and keeping bills as low as possible, is a real challenge,” the report concludes.
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Planning for the future #
Despite these warnings, the report takes a generally optimistic stance, noting that the UK Government has initiated reform of the country’s grid queue framework, which would enable more rapid connections to energy networks.
And even if both reports highlight the serious obstacles facing the UK’s data centre industry, data from Barbour ABI indicates that Britain’s data centre pipeline continues to grow.
According to this data, there are now 173 projects in this pipeline, promising capacity of up to 14GW.
This has increased from 10GW in March, suggesting that, despite the UK’s many challenges, organisations are still planning for the future.