UK Grid Operator Warns: Poorly Located Data Centers Could Drive Up Energy Costs

LootboxPhobia · 2026-02-12T11:38:05+00:00

The head of the UK power grid operator warns that building data centers in unsuitable locations or lacking flexibility will drive up energy costs. He recommends that large data centers should be located near wind farms to avoid safety issues and high prices, and emphasizes that the government needs to ensure sufficient grid capacity before allowing their operation.

LootboxPhobia

2026-02-12 11:38:05

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Investing.com – The head of the UK power grid operator warned on Tuesday that building data centers in unsuitable locations or lacking flexible demand capabilities could drive up energy costs.

Fintan Slye, CEO of NESO, suggested that data centers with power demands exceeding 1 gigawatt (equivalent to the needs of a small city) should be located in Scotland or other areas with wind farms that are frequently asked to reduce output.

“If you build them in the wrong place, and lack this flexibility, you could end up pushing prices higher and creating safety issues,” Slye said at the IE Week 2026 event in London.

In comments to reporters after a panel discussion, Slye emphasized that the UK government must ensure that large data centers only operate when the grid has sufficient capacity. He cited Texas as an example, where legislation requires data center operators to reduce grid usage in emergencies and switch to backup generators when needed.

Last year, the UK National Grid announced plans to connect up to 19 gigawatts of new data centers within five years, roughly one-third of the current peak demand. While it makes sense to build data centers near power sources (such as Scotland, which often produces excess wind energy), tech companies still prefer to build in London and its surrounding areas, despite the region’s grid reaching capacity limits, mainly due to latency considerations.

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