Ed Miliband, the energy secretary, has been accused by the Conservatives of jeopardising investment by technology companies after Microsoft said plans to build data centres were at risk because of delays in getting grid connections.
In November 2023, the US technology group announced a £2.5 billion plan to build AI infrastructure sites in London, south Wales and the north of England but the timeline has been left in disarray due to uncertainty over connections to the grid.
While National Grid had said it could not guarantee to complete connections before 2035, Microsoft wanted its data sites to be “operational within the next five years”, a Microsoft spokesman said.
Andrew Bowie, the shadow energy secretary, accused Miliband of fast-tracking grid connections to meet his “reckless” 2030 net-zero target while “leaving billions of pounds of investment from companies like Microsoft in the lurch”. Instead what industry and data centres needed was “cheap, reliable energy”, Bowie said.
Adam Ezzamel, head of offshore development at RWE, said at the end of last year that Miliband’s ambitions for the energy grid were “not grounded in realism” and risked a price surge. The German energy utility company operates ten offshore wind farms in the UK.
Bowie claimed the UK had “the highest electricity prices in the world” and said Miliband was “going to send bills soaring even higher”.
Microsoft said the “success and timing” of regional expansions in the north of England would “depend on the quantity and quality of power delivery to sites, which is currently undermined by regional power transmission upgrades”.
In south Wales, the company said expansion was also dependent on its “ability to secure suitable access to power, as well as supportable land sites”.
Despite the uncertainty over access, Microsoft was “committed to continuing its investment in datacentre capacity in the UK”.
“The ongoing energy connection reforms are moving in the right direction and we’re hoping that this will result in dates that will meet the needs of our investment timelines,” the company added.
Planning permission has been obtained by Microsoft for data centres on the sites of the former Eggborough and Skelton Grange power stations in North Yorkshire and at power stations outside Leeds and in Newport, South Wales. A facility is also being built in west London.
A government spokesman said four big technology companies announced £6.3 billion investment into UK data centres at the end of last year and this marked a “major vote of confidence in the UK to spur economic growth and AI innovation”.
“We are working with Ofgem and network companies to reform the outdated connections process and speed up delivery of new infrastructure.”
