The government’s decision to stop a proposed datacentre being built on an undeveloped piece of protected green land in west London highlights the pressure operators are under when balancing the demands of their investors with meeting the UK’s ever-growing need for compute capacity in a sustainable way.
The case, which is one of several datacentre planning disputes playing out across the country, centres on a £2.5m proposal to build a hyperscale server farm and supporting ancillary buildings, spanning 163,000m2, on the site of a former landfill in Iver, Buckinghamshire.
Planning documents for the proposed build show the developer, Greystoke Land, has committed to undertaking landscaping works, including the creation of parkland, and ensuring any waste heat generated from the datacentre could be reused in a district heating network.
But despite these nods towards sustainability and preserving some of the site’s biodiversity, details emerged in late October 2023 that the government has dismissed an appeal raised by the developer against Buckinghamshire Council’s decision not to grant the project planning permission.
Greystoke has six weeks from the end of October to decide if it wants to take its appeal to the High Court, but the company did not respond when Computer Weekly asked if it intended to pursue this option.
As things stand, the project cannot proceed without getting sign-off from the planners, but if the company does take its case to the High Court, there is no knowing how long that process might take to resolve. The longer the case drags on, the more money it will cost to build.
Additionally, with so many datacentre operators now owned by overseas private equity firms, there are concerns that investors may look at the issues Greystoke has run into with securing planning permission for its build and start getting cold feet about their own project development pipelines.
“Many of the private equity firms that have bought into the sector will have generally done so on a five- to seven-year deal,” said a private equity source with close working knowledge of the M25 project. “What we’re probably looking at here is a five-year plan to build a datacentre in the UK, but the question they need to ask is: are they going to get the return on investment they’re looking for when there is this degree of uncertainty [in the planning system]?”
The source continued: “Yes, the returns for investors are huge, which speaks well to the high amount of risk involved for developers, but whoever signed off on this M25 deal probably wasn’t anticipating the planning inspector would refuse to greenlight the project.”
This is particularly unerstandable when there is such high demand for datacentre capacity in this part of the UK, with data published by real estate services company Cushman & Wakefield in October 2023 confirming that London has very low levels of vacant datacentre capacity at its disposal.
“The under-construction capacity at the end of Q2 2023 stood at 118MW, whereas 610MW is in the planning stages. Considering the current under-construction pipeline, London is expected to become the first market in EMEA to surpass the 1GW of operational datacentre capacity,” stated Cushman & Wakefield in its October 2023 EMEA market update document.
“While London has consistently witnessed [the] addition of new capacity, demand has kept pace. Therefore, the vacancy has remained in single digits – 9% at the end of Q2 2023.”
Government under fire
Against this backdrop, it is, perhaps, understandable why the government’s decision to block the project has seen it come in for fierce criticism and attracted the attention of the national media.
On this point, the government has been described as “deranged” for blocking the build in the national media’s coverage of the affair, with the project’s supporters deriding the government for wanting to protect a piece of land that is overlooked by the M25 motorway and neighbours a busy industrial park.
“If the government is serious about becoming a tech superpower on the world stage, we cannot be slowing down on building datacentres – we should be speeding up” Mark Boost, Civo
LinkedIn has been flooded with comments in recent weeks from datacentre industry watchers about the case. Some claim the government’s dismissal of the appeal means it is standing in the way of its own past pledges to make the UK a tech superpower.
“If the government is serious about becoming a tech superpower on the world stage, we cannot be slowing down on building datacentres – we should be speeding up,” Mark Boost, CEO of Stevenage-based cloud services company Civo, told Computer Weekly.
“Ultimately, my concern is that if we fail to match the demand for compute with sufficient investment in our own datacentres, we risk operators looking abroad for projects. This will leave the UK reliant on other countries for critical infrastructure and undermine the UK tech sector,” he added.
“Datacentres are the bedrock of modern technology. They are the hub from which all other tech extends, and without a sufficient and sustainable network across the country, they will struggle to support [the UK’s] growing tech economy.”
Elsewhere, the government and the local authorities involved in the Iver datacentre case have also come in for praise for refusing to let datacentre developers ride roughshod across the UK’s planning laws, given the proposed development is within an area of metropolitan green belt land.
These are areas of land that are supposed to remain undeveloped to prevent the onset of urban sprawl between neighbouring towns and cities, but they can be built on under very special circumstances.
This is a side of the debate that Boost is also sympathetic to. The Iver datacentre case makes it clear, he said, that a balance needs to be struck between growing the UK’s datacentre footprint and ensuring the environmental and economic needs of the local communities are taken into consideration.
“One way to balance the concern of all involved may be to look at new ways of integrating datacentres within our communities. We have recently partnered with Deep Green, the team pioneering carbon-neutral compute, as their exclusive cloud provider,” he continued.
“By processing data in small edge datacentres or ‘digital boilers’ immersed in mineral oil, Deep Green is able to capture the waste heat from servers and put it to good use,” he added.
“At the moment, they are using it to provide free heat to local swimming pools, but the technology has a wide array of applications for other heat-intensive industries like food manufacturers or textile firms. In so doing, we can make datacentres part of our communities, helping drive technological innovation, whilst cutting energy bills and environmental costs in the process.”
Keeping things green
As previously mentioned, the plans for the Iver datacentre do include a heat reuse component, but – as documented in the planning documents – the crux of the problem with this development appears to be its green belt location.
Buckinghamshire Council and neighbouring local authority The London Borough Of Hillingdon have both publicly stated that this project (and – in turn – the UK’s insatiable demand for datacentre capacity) is not considered a special enough reason to sacrifice the area’s green belt.
“A lot of the private equity money that is sloshing around in the sector comes from overseas, mainly America, and they sometimes have a difficult time understanding the European market because they treat it as one place, rather than appreciating that each country has its own nuances and ways of doing things,” the private equity market source said.
“We buy land very differently to how they do, which is why the question in situations like this [where planning causes problems] is, ‘Why can’t we just buy a piece of dirt and build on it?’ And the answer to that is, ‘Because you can’t’.”
A dig through the various planning documents and responses certainly spells out in, no unclear terms, why datacentre developers cannot just build what they like wherever they like in west London.
In its September 2022 response to the planning application Greystoke submitted for the project in November 2021, Buckinghamshire Council said the datacentre would constitute an “inappropriate development” of the green belt that would harm the “character and appearance” of the site and its surroundings.
The London Borough of Hillingdon backed this view in its own written objection to the application, dated February 2023.
The document stated that the development of this green belt site could only proceed under “very special circumstances”, as per the terms of the National Planning Policy Framework, and that – based on its analysis of the application – the project does not meet any of the criteria to be considered special.
“The volume of the three large buildings alone would be vast and cause significant harm to the openness of the green belt. This harm is given substantial weight and is not considered to be outweighed by the very special circumstances presented under the application submission. As such, it is considered that very special circumstances do not exist.”
While some might argue that meeting the UK’s exponential demand for datacentre capacity is justification enough for permitting the development, these two local authorities and the Parliamentary under-secretary of state for local government and building safety, Lee Rowley, would disagree.
After Buckinghamshire Council refused to grant planning permission for the project, the developers exercised their right to appeal the decision with the secretary of state, and it was Rowley who responded.
He backed the findings of a local inquiry into the build that ruled the appeal should be dismissed, in a letter dated 30 October 2023.
“The secretary of state agrees… that the buildings’ size and bulk would be emphasised by the buildings being significantly higher and bulkier than those on the nearby West London Industrial Park, and that with the introduction of the external lighting, fencing and access roads, the site would be perceived as being occupied 24 hours a day, seven days a week, in contrast with its current unused and open character,” the letter stated.
“He agrees that the appeal proposal would significantly alter the character and appearance of the area from that of open land with characteristics of a rural/countryside location to that of an area dominated by three large buildings surrounded by ancillary structures.”
The latter added: “Overall, he agrees that the harm the development would cause to the character and appearance of the area should be afforded substantial weight.”
Inconsistent decision-making
Given the protections afforded to green belt land, it would seem the UK planning system is operating as it should, but it has also brought to light some inconsistencies in how datacentre developments are treated by different local authorities.
Helen Kinsman, senior vice-president of commercial and regulatory affairs at west London-based colocation company Virtus Data Centres, which operates several server farm campuses in the region, is among the industry stakeholders calling for a reform of the UK planning laws in the wake of the case.
“[The planning system] is dated and inconsistent for what is needed in today’s digital world … there are different checks and balances [that] dictate whether planning is granted or not” Helen Kinsman, Virtus Data Centres
“[The planning system] is dated and inconsistent for what is needed in today’s digital world. In terms of consistency, each and every borough has its own local agenda. This means there are different checks and balances [that] dictate whether planning is granted or not,” she told Computer Weekly.
As examples, she cites the different weighting there is from borough to borough on things like whether the planned facility will run on renewable power drawn from the grid or derived via power purchase agreements (PPAs), and how the finished project might affect the area’s air quality.
“Some [boroughs] are more sensitive to these issues, whilst others are willing to overlook certain criteria because they are keen to get a datacentre in their borough to benefit the local community… The system needs to be more consistent and transparent in providing clear step-by-step guidelines,” continued Kinsman.
On this point, news of the west London development comes hot on the heels of a story about plans to build…
