A London Assembly planning and regeneration committee report highlights rising pressure on the capital’s electricity grid, and the need to plan for both digital infrastructure and new homes.
Since 2022, parts of the London electricity grid, particularly in Hillingdon, Hounslow and Ealing, reached full capacity, thereby temporarily halting new housing developments. The Greater London Authority (GLA) has worked with National Grid and Ofgem to secure short-term fixes, ensuring more than 12,000 homes were connected by early 2025.
However, the committee warns London’s electricity needs will require long-term strategic planning to avoid further grid constraints and delays. Energy-intensive sectors such as data centres, in particular are forecast to grow by more than 200 per cent.
The report says a typical data centre now requires significant power equivalent to the needs of tens of thousands of homes. As the sector expands, these large, site-specific demands can add pressure to parts of the grid and create challenges for connecting new developments, it adds. These pressures make it harder and more costly to bring forward new homes, with implications for London’s wider economic growth and its ability to meet housing targets, the report warns.
The committee calls on the government to introduce a separate use class for data centres to enable their energy demands to be planned for in a more coordinated way. The GLA should also include a dedicated data centre policy in the next London Plan to tackle their significant energy impacts and ensure more coordinated energy planning across the city.
Other recommendations include the GLA’s infrastructure coordination service should publish the results of its data centres forecasting project without waiting for the London Plan’s evidence pack. The mayor should also prioritise retrofit funds for social housing and key infrastructure to reduce energy cost burdens on low-income households.
“London is at a critical moment, with energy capacity becoming a real constraint on both housing delivery and wider economic growth,” said committee chair James Small-Edwards. “Through this investigation we heard from councils, developers and residents about the delays, uncertainty and long-term risks posed by ongoing grid constraints.
“As demand for power rises, particularly from large energy users like data centres, we need a clear, strategic and long-term approach.”
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