The UK must overhaul its power strategy to keep pace with a surge in demand from data centres, industry analysts warn, as new figures suggest electricity consumption by these facilities could increase fivefold by 2030.
A report by the Nuclear Industry Association (NIA) and Oxford Economics has warned that the UK may fall behind in the global race to scale artificial intelligence if it doesn’t take action to accelerate nuclear power expansion to meet high and regular energy demand from data centres.
The report — Powering the UK Data Boom: The Nuclear Solution to the UK’s Data Centre Energy Crunch — finds that electricity demand from UK data centres is set to increase more than fivefold to 26.2TWh by 2030. This is equivalent to around 9% of the nation’s electricity use and around 30% of commercial consumption.
The change from today is stark, with data centres currently using around 5TWh of electricity per year, which is just 2% of the UK’s total. As a result, the expansion is likely to require significant new, secure, reliable, low‑carbon power fast.
Proponents argue that nuclear power is particularly well suited to meet the need. Unlike wind or solar, nuclear provides continuous, “always‑on” generation that data centres require for 24/7 operation. Over recent years nuclear output on the UK grid has been less variable than renewables.
New types of nuclear technology, including small modular reactors (SMRs) and advanced modular reactors (AMRs), are also being touted for their compact footprint and potential to be sited alongside energy‑intensive facilities. Industry observers say co‑location – building data centres adjacent to nuclear plants and directly contracting a portion of their output – could reduce project subsidies and improve commercial attractiveness.
Technology giants are already signalling interest. Amazon, Google, Microsoft and Meta have publicly committed to net‑zero targets and are investing in nuclear through power purchase agreements, direct stakes in SMR developers and plans for co‑location, according to the analysis.
But significant barriers remain. Britain faces prolonged grid connection wait times, sometimes running to years, while industrial electricity prices are among the highest in the OECD. Land and connectivity constraints, particularly around London where latency‑sensitive services cluster, complicate siting. The government has introduced measures such as an AI Opportunities Action Plan and AI Growth Zones to help, but industry sources warn that implementation needs to be consistent.
The timing of the nuclear transition adds to the challenge. Much of the existing UK nuclear fleet is due to retire by the end of the decade; only Sizewell B is expected to operate beyond March 2030. New projects under construction, Hinkley Point C and Sizewell C, will add about 6.4GW when complete, and the government has selected Rolls‑Royce’s SMR design as preferred technology partner under its Great British Energy‑Nuclear programme. Yet these projects are not expected to deliver at the rapid pace demanded by the data centre sector: SMRs are targeted for deployment in the early to mid‑2030s, whereas data centre developments commonly follow 18–24 month construction cycles.
To bridge the timing gap, some developers are considering locating new facilities beside decommissioned or soon‑to‑retire power stations. These sites often have existing licences, strong grid connections and safety infrastructure, potentially speeding deployment. In the short term, however, that approach risks greater reliance on gas or diesel back‑up generation, undermining near‑term decarbonisation goals unless replacement clean capacity is accelerated.
Industry representatives are calling for reforms to accelerate nuclear deployment and improve planning and procurement certainty. Suggested measures include faster licensing and planning for SMRs and AMRs, clearer long‑term power contracting frameworks for data centre operators, and expedited delivery of gigawatt‑scale projects to replace retiring capacity.
Analysts say the choices made now will influence whether the UK remains an attractive location for AI and cloud investment as global firms increasingly prefer jurisdictions with stable, low‑carbon and competitively priced power. With digital services driving both economic growth and energy demand, policymakers face the twin task of rapidly expanding firm low‑carbon capacity while avoiding short‑term increases in fossil fuel use.
NIA chief executive Tom Greatrex commented: “Britain’s digital future depends on secure, clean energy. We can only build the AI economy of tomorrow with rapid, expedited deployment of clean, reliable, sovereign nuclear power in the mix. The recommendations of the Government’s Nuclear Regulatory Taskforce give us a perfect opportunity to create a better framework for deploying nuclear to meet data centre needs, but we must move now.”
Oxford Economics economist and author of the report, Clarissa Hahn said: “In this report, we identify several competitiveness challenges facing the UK—such as high industrial electricity prices and delayed grid connections. Our findings show that nuclear energy is uniquely positioned to meet this growing demand: offering reliable 24/7 power with a low-carbon footprint that the tech sector is calling for.”
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