Top 10 tips for data centre development in urban areas

In this article, Shoosmiths and GIA explore some of the issues to navigate in order to successfully develop data centres in urban areas.

There is a continuing interest in the development of data centres in urban areas. The new £750m data centre development in Newham demonstrates this appetite. Also, the recent approval of the Court Lane data centre project in Buckinghamshire, despite local opposition, underscores the growing demand for data infrastructure and the government’s intention to intervene to facilitate data centre development.

As the data centre industry evolves rapidly, driven by technological advances such as artificial intelligence (AI) and quantum computing, the pressure to meet new demands while ensuring sustainability and operational efficiency is mounting. Urban data centres are not a new concept, but their development needs to be carefully handled and approached differently to development in non-urban areas. Their development requires careful planning and a comprehensive approach, integrating technical, legal, and environmental expertise.

At Shoosmiths, our deep legal knowledge and experience, particularly in navigating complex planning regulations and energy policies, can help developers steer through the legal landscape surrounding data centre projects. In parallel, GIA's expertise in rights of light, solar, wind, and advanced thermal management systems allows us to offer invaluable support in integrating energy-efficient solutions into urban developments. Together, we provide a powerful combination of legal and technical skills to address the unique challenges of building data centres in urban environments.

Here are some key tips and insights on how to successfully navigate the issues with development of data centres in urban areas.

Power

1. High power demand: Data centres require vast amounts of electricity to run servers, cooling systems, and other equipment. Urban areas, especially in cities like London, already have significant demand for power, and accommodating additional load can strain the existing infrastructure. This is exacerbated in areas such as the South-East where there is a governmental drive to build new homes, causing competition for power. Data centre operators should collaborate with local utilities early in the site acquisition and planning process to ensure that the necessary power capacity can be allocated and reserved.
2. Grid reliability: Urban power grids may be less reliable than those in less dense areas due to congestion, aging infrastructure, or susceptibility to disruptions like power outages. As data centres need a stable and uninterrupted power supply, any grid instability is a major concern for operations. Operators will inevitably invest in robust backup power systems, such as generators and uninterruptible power supplies (UPS), to ensure continuous operation during grid outages, but obtaining certainty in the local grid network in the due diligence stage of a new development is essential. Potential upgrades to the grid infrastructure may need to be explored
3. Sustainability concerns: There is increasing pressure on businesses to reduce their carbon footprints, and this is being felt more and more by data centre providers. Hyperscalers are a driving force behind the need for providers to be more sustainable. In urban areas, where environmental regulations may be stricter, ensuring a sustainable power supply (often through renewable energy sources) can be challenging due to the complexities of integrating these sources into the local grid. Although it may be more challenging for data centres in urban areas to directly access clean energy sources, there is certainly a growing trend in considering renewable energy and exploring on-site renewable energy generation options to reduce reliance on the grid as part of the initial development of a new site.
4. Solar photovoltaics (PV): Solar panels can play a pivotal role in reducing the energy consumption of data centres. If there is any available space – whether on rooftops, canopies, or even the sides of buildings – why not seize the opportunity to install panels and immediately reduce the reliance on non-renewable energy sources? It's a win-win scenario: over the course of 25 years, a data centre that generates its own solar power could effectively cover up to 20 years' worth of its energy needs, providing significant renewable energy and cost savings. This approach not only helps with energy efficiency but also supports the sustainability goals of the industry. For instance, combining solar panel installations with canopies can enhance the performance of chillers, reducing cooling costs while simultaneously generating energy. Additionally, the vertical cladding of building sides with solar panels can maximise the use of space, turning what would otherwise be unused areas into productive, energy-generating surfaces. This approach not only lowers operating costs but also aligns data centres with the growing demand for green energy solutions, making them both more sustainable and economically viable in the long term.
5. Energy costs: The cost of electricity in urban areas is often higher than in rural locations, due to factors like transmission losses, infrastructure costs, and competition for limited resources. This can make operating a data centre in a built-up area significantly more expensive, especially given the power-hungry nature of such facilities. To counter this, it’s essential to implement energy efficiency measures to reduce overall power consumption. This includes using energy-efficient servers, optimising cooling systems, and employing advanced energy management software to monitor and control energy usage. Given the high-power demands of data centres, thermal management becomes critical for optimal performance. With the development of increasingly powerful chips, such as Nvidia’s Blackwell and Rubin, the need for effective cooling systems is even more pronounced. Advanced Computational Fluid Dynamics (CFD) analysis plays a key role in this. By examining internal airflow paths, CFD provides valuable insights that can guide the design of thermal management systems, minimising energy losses and boosting overall data centre performance. This holistic approach not only improves energy efficiency but ensures data centres can operate at peak capacity while reducing costs.

Planning:

6. National policy: There is increasing appreciation by Government that data centres are an essential service which are integral to the economy, having recently being recognised as ‘critical national infrastructure’ and decision makers highlighting that a failure to meet the need would have negative consequences for the UK digital economy. Recent amendments to the NPPF aim to make it easier to build “growth-supporting infrastructure such as…data centres” and changes to green belt policy and the introduction of grey belt may offer further potential to unlock sites. The previously mentioned approved data centre in the Buckinghamshire green belt shows a positive direction of travel from Government.
7. Positive planning: There are a myriad of issues within the current planning system when it comes to the delivery of data centres, from sites typically being green belt or constrained locations, the general lack of local policy support, the shoe-horning of the appropriate use within the wider B8 Use Class (Storage and Distribution), demonstrating sufficient and robust demand or need, to more subjective matters of design and visual impact. Many of these issues could be reduced or overcome through positive engagement throughout the plan making and site allocation process at a local level to establish the necessary planning policy foundations and designations for future applications.
8. Rights of light: As data centre developments increasingly move closer to urban areas, addressing the impact of light - both natural and artificial - becomes a critical consideration and there’s an increasing need to address light concerns early in the planning process to avoid potential legal and logistical issues. This is both a planning and private legal concern, as the size of data centres – often four or more storeys tall – can have significant impacts on surrounding areas, including daylight and sunlight access for neighbouring buildings, parks, and residential areas. Data centres don’t require natural light inside, but their integration into the urban fabric is crucial for successful placemaking. No one wants to see a bulky, windowless building dominating the streetscape. By incorporating elements like active frontages, such as cafés or other community-facing spaces, data centres can contribute positively to the local environment. These considerations will become even more important as the industry continues to evolve. Properly designed, data centres can balance technological needs with urban aesthetics, benefiting both developers and the communities they serve.

Wind:

9. External airflow to cooling systems and generator systems: Effective cooling is critical for data centres, and external airflow management can be a significant challenge, especially in complex-built environments. Optimising the performance of externally mounted cooling and generator systems requires a detailed understanding of both localised airflow and wider site-specific wind patterns influenced by surrounding structures. Conducting comprehensive CFD analysis can help identify potential inefficiencies and inform strategies to ensure reliable system performance.
10. Critical construction time: Rapid construction is often a priority for data centres to achieve operational readiness quickly. Wind conditions, however, can disrupt construction activities, particularly crane operations. Advanced wind modelling provides valuable insights into potential crane downtime and allows construction teams to plan more effectively. By anticipating weather-related disruptions and optimising the use of lifting equipment, construction schedules can be managed more efficiently, reducing delays and supporting timely project completion.

By tackling these challenges and adopting these strategies, data centre operators can enhance energy security and ensure reliable, sustainable operations in urban areas.

Further information

This article was written in partnership with GIA . To explore solutions and learn how Shoosmiths and GIA can support your data centre developments, don’t hesitate to get in touch.