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The UK government is considering forcing data centre developers to invest in local communities and meet sustainability targets in exchange for priority access to the grid, as ministers miss their own deadline for introducing new planning rules.
Under proposals being examined ahead of Wednesday’s Budget, developers could be required to make financial contributions to local areas or meet energy-use standards in return for faster planning approvals or grid connections.
The proposed ‘data centre covenant’, first reported by the Financial Times, comes as ministers attempt to triple Britain’s computing capacity to six gigawatts by 2030, despite growing pressure on the electricity network.
The government has already brought data centres into the Nationally Significant Infrastructure Projects regime, allowing major developments to be considered through a national planning process.
But ministers have missed their own deadline to consult on the National Policy Statement intended to guide those decisions.
The government committed in November 2025 to launching a consultation within three months, but the February deadline passed without the proposals being published.
In a recent parliamentary answer, AI minister Kanishka Narayan said the statement would be published “in due course”.
The policy will establish how major data centres should be designed and their environmental impacts managed, while ministers are also considering granting the infrastructure Critical National Priority status.
Grid delays threaten investment
The proposals come as electricity shortages increasingly threaten Britain’s efforts to attract investment from major tech firms.
Last week, Microsoft withdrew from plans to build Britain’s largest AI data centre in Loughton, Essex, after grid constraints prevented the project from securing power for its planned 2026 opening.
Britain’s electricity connection queue surged from 41GW in November 2024 to 125GW by June 2025, according to Ofgem, with data centres accounting for at least 80GW of applications.
The government has sought to address the backlog through its proposed Great British Grid, which would allow businesses to build more of their own electricity connections.
Meanwhile, growing opposition to data centre construction has raised questions about whether local communities are benefiting from the investment.
An investigation published on Tuesday by Spotlight on Corruption found that senior government officials met 137 businesses while developing the country’s AI Growth Zones policy, compared with just two community groups and no environmental organisations.
A taskforce involving Nvidia, Microsoft and Cisco recently warned ministers that Britain had roughly 12 months to prevent US-style opposition from disrupting data centre construction.
The government has already announced that councils hosting data centres in AI Growth Zones will be able to retain additional business rates generated by the developments.
The proposed covenant could go further by tying planning and grid access directly to commitments from developers, although its final terms have yet to be agreed.
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