London Committee Calls for Separate Planning Class for Data Centers to Ease Grid Pressure

London Committee Calls for Separate Planning Class for Data Centers to Ease Grid Pressure December 1, 2025 A London Assembly committee has issued a stark warning that the UK capital's electricity grid is under severe strain from the booming data center sector, to the point of contributing to delays in critical housing construction. The call for urgent regulatory reform highlights the growing tension between national ambitions for technological leadership and the practical limits of urban infrastructure. The London Assembly's Planning and Regeneration Committee, in a report published this week, stated that data centers have become a "contributing factor" to house-building delays due to their massive and concentrated power demands. The committee scrutinizes plans by London Mayor Sadiq Khan and found that long-term electricity needs, particularly from "energy-intensive" sectors like data centers, require "long-term strategic planning to avoid further grid constraints and delays." To address this, the committee made ten key recommendations. The central proposal urges the UK government to create a separate "use class" for data centers within the planning system. This would formally distinguish them from other commercial developments and allow for more targeted policy. Furthermore, it recommends that the Greater London Authority (GLA) include a dedicated data center policy in its next London Plan to manage their "significant energy impacts." The scale of the challenge is underscored by data from the UK's National Energy System Operator (NESO), cited in the report. It forecasts that data center electricity demand in the UK could surge by 200 to 600 percent between 2025 and 2050. Individual AI-focused facilities can have power requirements equivalent to tens of thousands of homes, placing immense pressure on local grids. James Small-Edwards, the Assembly Member and committee chair, emphasized the critical juncture. "London is at a critical moment, with energy capacity becoming a real constraint on both housing delivery and wider economic growth," he said. He warned that the government's push for AI leadership risks coming at a high cost: "If we don’t plan ahead, we run the risk of not meeting those ambitions, or realising those ambitions at the expense of urgently needed housing and infrastructure." The committee's intervention comes as the UK government advances policies to cement the country's status as an AI hub, including legislation that could classify data centers as "nationally significant infrastructure projects." The report serves as a caution that without integrated planning for power, these economic goals may directly conflict with solving the nation's housing crisis. "Grid capacity cannot be an afterthought," Small-Edwards concluded. Source: datacenterdynamics