Data centre challenges in the spotlight after planning deferral

Construction experts have warned of mounting obstacles to getting data centres on site after councillors deferred a decision on a major Hertfordshire scheme amid concerns over water supply.

Hertsmere Borough Council’s planning committee postponed a decision on Ark Estates’ proposed 131,000 square metre campus on a former hotel site in Watford, last week.

“We are deferring because we would like more information from Affinity Water, to allow discussions around Section 106, and on grounds of the height and design,” said committee chair Helen Green.

The decision comes despite the government’s pledge in last month’s Budget to support data centres needed for AI and national resilience.

Ed Griffiths, head of business and client analytics at construction insight specialist Barbour ABI, said the process of getting data centres through planning was “getting more onerous despite there being an appetite for them at national level”.

A draft  National Policy Statement for Data Centres, published last month, proposed allowing data centres of 100MW or more to use the Nationally Significant Infrastructure Projects planning route.

But Griffiths said it was “at local level that pressure is growing”, adding that grid connections were among the biggest barriers to starts on site.

“Expect the pipeline to slip and shrink,” he said. “Deferrals, appeals and legal challenges could add roughly six months to two years in our estimate, and costs before construction will rise.”

He expected activity to concentrate on brownfield sites with existing power connections, AI Growth Zones and projects using the national planning route.

Shane O’Driscoll, director and data centre lead for the UK and Europe at cost consultant Currie & Brown, said the planning environment for data centres was “evolving”.

“National policy is increasingly supportive of strategically important developments, but expectations around responsible development and project readiness are becoming clearer,” he added.

“Data centres face challenges on multiple fronts, from securing power and water to gaining community support.

“Sustainability needs to be built into the delivery strategy from the start. Site selection, power and water requirements, impacts on local infrastructure and community engagement all need to be considered together.

“Addressing these issues early can strengthen the planning case and help identify potential constraints before they become delays.”

Ark Estates applied last December for consent to build a data centre campus on the Hertfordshire Green Belt, which would include four 36 metre-tall tech sheds and two substations, alongside a 20 metre-high visitor building and three access points for vehicles.

A summary of objections had included the impact on water supplies to homes.

Affinity Water said it had no objection to the scheme, “provided that recommended conditions are attached and it has been proven that the public water supply will not be impacted”.

Planning officers conceded that there were “significant” landscape impacts and harm to character and appearance, as well as “moderate” effects on neighbouring amenities.

But they said the need for data centres was “very significant” as was the lack of alternative suitable sites. The economic and social benefits of the project should also be factored in, said the report to councillors.

“It can be concluded that the benefits of the scheme taken together do clearly outweigh the harms,” said officers.

They recommended delegating the granting of consent to the head of planning, subject to a section 106 agreement and conditions within six months. However, councillors voted to defer the application.

Tory councillor Glenn Briski told the meeting Affinity Water had “not confirmed in writing that it has the capacity to supply this development along with all other projected growth”.

He added: “My recommendation would be that we defer and seek written confirmation.”

Ark Estates, Affinity Water and Hertsmere Borough Council have been contacted for comment.

Analysis by Barbour ABI for Construction News, published in August, identified more than £100bn of proposed UK data centre construction, with much of it not yet on site.

The Data Centre Alliance warned this summer that as more systems rely on advanced computing, “there is a risk that infrastructure delivery timelines will lag behind national AI ambition”.

And a think-tank calculated that the UK must deliver new data centre capacity at seven times its recent rate to meet developers’ plans by the start of the next decade.