Data centres: Scotland is poised to slash the environmental cost of the AI boom

When Prime Minister Keir Starmer announced data centres would be added to the list of critical national infrastructure, he sparked a frenzy across the tech sector. The decision put these centres on the same footing as water, energy and emergency service systems, meaning they would get extra government support if hit by a major incident such as a cyber-attack.

Now the question remains: who will host the new boom of these power-hungry sites? Scotland is poised to fill the gap.

Technology secretary Peter Kyle called them the “engines of modern life”. These massive buildings, stacked with rows of servers, store, process and transmit all our data. “They’re the backbone of this digital world,” Saleh Seyedzadeh, head of data at The Data Lab, explains to Holyrood.

Scotland has been talked about as a potential data centre hub for around two decades. However, the move to remote work post-pandemic and the AI revolution have significantly accelerated the timescale for their construction. 

“There’s lots of noise now, lots of enquiries going about… I think in the next year, hopefully, we’ll get to see something. I know some of the big players in the market have been looking at Scotland really seriously,” leader of consultancy operations in EMEA (Europe, Middle East and Africa) for Soben, Robert McQueen, says.

While McQueen refrains from telling me who these “big players” are, big tech companies including Amazon Web Services, Cloud HQ and CoreWeave have pledged to invest a combined £25bn in the next five years in new UK data facilities. And in 2021 a report by the Scottish Futures Trust identified 12 sites across Scotland, spanning from Annan to Caithness, as prime sites to lead the green data centre revolution. Moreover, a Freedom of Information request showed that, as of February 2025, Scottish Enterprise was dealing with 26 “live” enquiries on the establishment of new data centres in Scotland.

But while renewable sources produce 113 per cent of Scotland’s electricity consumption – according to 2022 statistics – the AI boom shows no sign of slowing down, with the technology at the heart of plans for public service reform. Therefore, whether Scotland’s renewable energy output will keep pace with demand in the long run remains a pressing challenge.

Earlier this month a report by the International Energy Agency (IEA) estimated that the electricity demand from data centres across the world will double by 2030, consuming 945TWh (terawatt hours) of electricity each year. To put it into perspective, that is six times more than the entire annual consumption of Scotland and three times more than the UK. 

And last March the chief executive of the National Grid John Pettigrew said the power required by data centres would increase six-fold in the next decade, calling for “bold action” for the network to cope with “dramatically” growing demand.

If you were to ever ask me how much renewable power data centres would need, that is unfortunately something that even the sector itself would struggle to answer

An uncontrolled uptick in demand in the sector has already produced its share of cautionary tales over the past decade. To date, the data centre industry has focused on Frankfurt, London, Amsterdam, Paris, and Dublin, also known as the FLAPD market. And Ireland has been at the sharp end of the massification of data centres. Its market has become saturated, with recent research commissioned by Friends of the Earth (FOE)revealing electricity demand from the facilities has grown at an annual rate of around 20 per cent since 2015. The report showed that centres are expanding at the same pace as renewables generation, meaning that unless “decisive action” is taken, data centres will continue to divert renewable energy to serve demand growth rather than to displace fossil fuels.

“If you were to ever ask me how much renewable power data centres would need, that is unfortunately something that even the sector itself would struggle to answer”, Luisa Cardini, head of the data centres programme at TechUK, admits.

However, she adds that while “it might increase slightly” we won’t see as much of a “curve”. TechUK research suggests that Ireland’s case might be an exception to the rule. It showed that during the time that country’s data centre electricity demand rose year-on-year, the sector’s global electricity use remained relatively flat, despite data centre workloads more than doubling.

Big players in the market have been looking at Scotland really seriously

Advancements in energy efficiency and cooling technologies have allowed the industry to cut its energy consumption. And while the drive in AI is expected to bring a rise in demand, the IEA also said that emissions reductions facilitated by AI could help offset the increase.

 “Data centres help drive the sustainability agenda… AI allows us to do climate modelling. It’s one of those things that could help us change the way that we approach things”, McQueen says.

But what happens in the event of adverse weather? Intense winds can force wind turbines – which produce more than three quarters of Scotland’s renewable energy output – to shut down. Earlier this year, thousands had to be switched off during Storm Éowyn as its 100mph gusts would’ve overwhelmed the power grid.

Cardini, however, insists these events are “incredibly rare”, adding that a mix of renewable sources should prevent data centres from putting a strain on the grid.

 “It’s also worth noting that data centres have resilience themselves, they rely a lot on batteries for example. So, they often have on-site batteries, especially when there are fluctuations in the grid and those tend to kick in first. In the case of real adverse events, we’re talking a storm or say what recently happened with Heathrow, they would then kick in their generators. It’s incredibly rare.”

She adds: “I would assume that one could fathom that in a situation where a data centre is in Scotland and it only uses renewable energy, that renewable energy itself will come from a mix of renewable sources as well. I’m really struggling to imagine a situation where there’s really no wind, no sun whatsoever, and also no waves.”

Labour MP Gordon McKee also points to the importance of storage to avoid a worst-case scenario where renewable energy output falls short.

“Energy storage is critical to creating a renewable energy system that can deliver energy 24/7, which is why the government has announced investment support for energy storage. This will help fix the issue that has meant no significant long duration energy storage facilities have been built in the UK for 40 years”, he tells Holyrood.

On the heat front, as McKee puts it, Scotland has “cold weather in abundance”. This means that data centres’ cooling requirements would be lower. And while heatwaves are becoming more frequent, Scottish researchers are trialling various initiatives to harness excess heat more efficiently. In other words, data centres’ heat could be leveraged to create a circular economy. The University of Edinburgh is looking into using excess heat from its data centre to power radiators and under-floor heating around the estate. It is estimated the project would cut heating costs by around eight per cent.

Data centres help drive the sustainability agenda

Similarly, the university has also begun trialling a system that uses waste heat from its national supercomputer to warm at least 5,000 households. The project is looking into using old mines near the computing facility to store the heat which would later be made available to people’s homes via pump technology. Around a quarter of all UK households sit on top of former mines, meaning that if the trial succeeds, recycled heat from data centres has the potential to keep seven million households warm.

Cardini says that Ireland’s situation was largely caused by “poor planning” and “foresight” of what could happen – an argument backed by the FOE research, which cited stricter power and gas grid connection policies for data centres as well as a plan for the use of surplus renewable energy production as key recommendations for Ireland to get back on track with its climate targets.

“What we’ve been calling for, and I think the government is understanding that, is you need more strategic planning, you need to recognise that you shouldn’t cover your land in data centres the same way that you shouldn’t for any industry. It’s all about a balance – you want a thriving tech economy, well, you’re going to need a digital economy, you’re going to need data centres.

“Where they go, how they’re built, how sustainable they are, what they can give back to the community, all can be taken into consideration with a more strategic and holistic approach to planning, including whether it makes more sense for a region to cluster them or to actually have them more spread apart.

“So, I think the example of Ireland was due to these questions not really coming to mind or the result was an unintended consequence of not really understanding how data centres work and are built.”

The University of Edinburgh is planning to transform its Informatics Forum on Potterrow into a £28m Data Technology Institute. It also plans to use excess heat from its data centre to power radiators and under-floor heating around the university

Indeed, in 2021 the Scottish Government launched its Green Datacentres and Digital Connectivity Vision and Action Plan detailing how it would support the growth of green data centre clusters as part of Scotland’s economic recovery following the Covid pandemic. A government spokesperson told Holyrood a ministerial working group met across 2021-2022 “to establish the groundwork for future policy activity and delivery” and confirmed there is ongoing work with stakeholders to ensure Scotland has the necessary digital infrastructure required to rip the economic benefits of a “digital and data economy”. Moreover, attracting a “significant pipeline of inward investment in green data centres” forms part of the government’s green industrial strategy, launched last year. However, four years on since the action plan, a strategy specific to the sector is yet to be published. Cardini worries that a lack of clarity could make Scotland miss out on the opportunity.

She says: “Uncertainty in all of its forms is just generally not good for business or innovation… they [data centres] come with a very high initial cost for building and therefore not having that certainty from a planning perspective, energy perspective, delays and workforce is just something that in the current geopolitical and economic climate, a lot of companies would rather avoid.”

And Scotland is in a race against the clock to get its planning in order, with multiple players vying to plug the gap – even space is now in the running to meet growing demand. In March, US-based company Lonestar Data Holdings successfully deployed a shoebox-sized data centre on the moon and plans to launch a small data centre into orbit around the moon by 2027. With unlimited solar energy at its disposal, space could soon rival Scotland’s renewable edge.

“Data centres are a must for pushing industrial AI... AI adoption needs good infrastructure. In one way or another you need to go for them sooner or later. So, if you have it yourself, you can be a provider rather than just a consumer,” Seyedzadeh says.

Missing out on the data centre boom could also have a knock-on effect on the broader tech and energy sector. Becoming a hub could help Scotland deliver its just transition plan and ensure booming industries such as space and fintech have the digital infrastructure they need to continue growing.

McQueen says: “There’s a massive skills shortage in the data centre sector. I see that as one of the real big potential positives for Scotland of a data centre development coming. We have a workforce from oil and gas, and things like Grangemouth, people coming from there have a natural skill set that fits well with the construction of data centres.

“Beyond that, I see a real opportunity for young people to come through into data centres and into construction… When you attach a name like a Google or Amazon or Meta or Tiktok… that gets people excited and gets young people thinking maybe that’s something that I want to be involved in. I think that could create a real opportunity for Scotland.” •