Written submission from Greater Manchester Combined Authority (DCU0028)

Risks and opportunities to the sustainability of data centres in the UK – Call for Evidence 

Environmental Accounts Committee: Risks and opportunities to the sustainability of data centres in the UK - Committees - UK Parliament

2nd April 2026 - Submission by the Greater Manchester Combined Authority  

Greater Manchester Combined Authority 

Greater Manchester is one of the most successful city-regions in the UK – representing the largest city region economy outside London, with a gross value added (GVA) of over £100 billion and is the fastest growing economy in the UK. Our vision is to make Greater Manchester a thriving city region where everyone can live a good life. 

The Greater Manchester Combined Authority (GMCA) is made up of the ten Greater Manchester councils and Mayor, who work with local services, businesses, communities, and other partners to ensure every part of our city region is successful. The ten local authorities that make up Greater Manchester (Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford, and Wigan) have worked together voluntarily for many years on issues that affect everyone in the region, like transport, regeneration, and attracting investment. 

Introduction

GMCA welcomes the opportunity to submit evidence to the Select Committee’s inquiry into the sustainability of data centres in the UK.

Data centres are underpin the UK’s digital economy, public services, and growing ambitions in artificial intelligence (AI), advanced research and innovation. At the same time, they present material challenges in relation to energy demand, carbon emissions, water use and spatial planning.

Greater Manchester provides a relevant and timely regional case study. It is widely recognised by industry as the UK’s leading data centre location outside London, hosting around 30 operational facilities and attracting significant interest for new colocation and AI ready capacity. The city region’s experience illustrates both the opportunities and risks facing the UK as data centre growth accelerates.

This submission draws on evidence developed through Greater Manchester’s draft Data Centre Strategy and engagement with industry, network operators and public sector partners. While grounded in local experience, the issues raised are of clear national relevance.

1. What current and future factors and trends are driving demand for data centres and what opportunities and challenges do they pose for the UK?

Demand for data centres in the UK is being driven by several reinforcing trends:

• Continued growth in cloud computing and digital services across finance, telecommunications, creative industries and public services.
• Rapid expansion of Artificial Intelligence (AI) and high performance computing (HPC), particularly as AI moves from experimental use towards widespread deployment.
• Rising requirements for data sovereignty, resilience and low latency services, increasing demand for in country and regionally distributed compute.
• Deployment of 5G, Internet of Things (IoT) and smart technologies, which depend on edge and regional data centres.
• Public sector digital transformation, including the use of AI in health, local government and public administration.

Market evidence suggests global data centre power demand could double by 2030, with particularly strong growth in AI ready and hyperscale facilities.

Opportunities for the UK

For the UK, data centre growth presents significant opportunities:

• Economic competitiveness: Data centres are foundational to the UK’s ambitions in AI and digital services, life sciences, and advanced manufacturing.
• Regional economic growth: Constraints on land and power in the South East are driving investment towards regional cities. Greater Manchester demonstrates how decentralising capacity can improve national resilience and support regional growth.
• Innovation enablement: Compute access for universities, research institutions and frontier sector SMEs enables data centres to support innovation in AI, genomics, climate modelling and materials science. The latter is a particular strength of our City Region.
• Supply chain and skills development: Construction, engineering, digital and low carbon supply chains benefit from sustained investment.

Challenges

The principal challenges include:

• Environmental impacts: High resource demands can generate significant carbon emissions, and may include high water use and land take. Hyperscalers  usually require over 100MW of power for one site. For context, 100MW is sufficient to power approximately 40,000-100,000 households, which represents between 3.4 – 8.5 per cent of the total households in Greater Manchester.
• Energy capacity and grid constraints: The high energy demand for large data centres can limit availability for other projects, raise consumer energy prices, and in extreme cases lead to blackouts (as seen in Ireland).
• Limited integration with the local economy. The advantages are often not directly experienced by the local community, in contrast to other large-scale projects. From a local perspective, this reduces the appetite to support developments, given the negative environmental impacts are felt locally while economic benefits are realised elsewhere. Data centres typically provide less direct employment unless specific measures are implemented to connect them with regional supply chains, create social value, and facilitate access to computing resources for local innovation assets.

2. What are the environmental impacts of different types of data centre currently operating in the UK and what are the future impacts likely to be?

Key environmental pressures

Data centres already account for approximately 4% of Great Britain’s electricity demand, with projections suggesting this could rise to around 11% by 2035 if current trends continue. Carbon emissions are primarily driven by electricity consumption, alongside backup power systems. Water use is becoming increasingly significant as AI workloads drive a shift towards liquid cooling.

Environmental impacts vary considerably by data centre type, scale and workload.

Current impacts by type:

• Edge and small colocation data centres (typically 1–5MW):

• Lower absolute energy and water demand.
• Often embedded within urban areas, with limited land take.
• Increasing in number as demand for low‑latency services grows.

• Large colocation facilities (20–40MW):

• Substantial electricity demand.
• Increasing use of high‑density racks and liquid cooling to support AI workloads.
• Greater potential for heat recovery and energy efficiency at scale.

• Hyperscale data centres (100MW+):

• Very high electricity demand, equivalent to tens of thousands of homes.
• Significant grid reinforcement requirements.
• Potentially high water demand depending on cooling design.
• Large land take with relatively low long‑term employment density.

1. What are the potential short, medium and long-term projections of these impacts?

Future impacts and projections:

• Short term (to 2030): Rapid growth in electricity demand, particularly from AI ready colocation facilities, risks outpacing grid reinforcement and renewable deployment.
• Medium term (2030–2035): Increasing prevalence of high-density AI workloads will intensify pressures on electricity and water resources, while also increasing opportunities for heat reuse and energy efficiency.
• Long term (post‑2035): Environmental impact will increasingly depend on the extent to which data centres are integrated with renewable generation, storage, heat networks and a fully decarbonised power system.

3. What impact are data centres having on climate change and the Government’s Net Zero targets and how will this change in the short, medium and long term in the UK?

Data centres present both a risk to achieving Net Zero and a critical enabling role in decarbonising the wider economy.

In the short term, rapidly rising electricity demand risks increasing emissions if renewable deployment and grid upgrades do not keep pace. In constrained areas, this may prolong reliance on fossil fuel generation.

In the medium to long term, data centres can support Net Zero by:

• Acting as anchor customers for new renewable generation.
• Providing flexibility services through storage and demand management.
• Supplying waste heat to low carbon heat networks.
• Enabling AI driven optimisation across energy, transport and industry.

From Greater Manchester’s perspective, aligning data centre growth with the city region’s 2038 Net Zero target has highlighted the importance of spatial planning, energy coordination and enforceable sustainability expectations.

4. To what extent will Artificial Intelligence (AI) accelerate the need for data centres and is this being adequately taken account of by the Government and relevant bodies, such as the Climate Change Committee and the Office for Environmental Protection, in terms of nature, the environment and climate change?

AI is the single most significant accelerator of data centre demand. AI training workloads require extremely high density, energy intensive compute. Over the next five years, AI inference is expected to overtake training as the dominant demand driver, increasing the need for regionally distributed capacity close to users.

Government initiatives such as the UK Compute Roadmap and investment in national research compute are welcome. However, Greater Manchester’s experience suggests that:

• Regional and sector‑specific AI compute demand is not yet fully understood.
• Energy and spatial planning frameworks do not consistently account for AI driven growth.
• Access to private sector compute for SMEs, researchers and public services remains uncertain.

7. What existing and emerging technologies can be used to minimise the environmental and climate change impact of data centres?

1. How mature are these technologies and are they ready to be rolled out at the scale and pace required to match the potential expansion of data centres?

A range of technologies are available or emerging:

• Energy efficiency measures (advanced cooling, higher utilisation): mature and deployable now.
• Liquid and immersion cooling: increasingly mature and essential for AI workloads.
• On‑site renewable generation: mature but limited in scale.
• Private wire connections and long term PPAs: proven and scalable.
• Battery and long duration energy storage: rapidly maturing and critical for resilience.
• Low carbon backup fuels: emerging but promising.
• Heat reuse initiatives (covered in detail under Q8)

In conclusion, most technologies are technically viable today, but scaling them at pace requires regulatory certainty, grid reform and coordinated planning.

2. What role can renewable energy play in reducing the carbon footprint of data centres?

Renewable energy is central to data centre sustainability. From a Greater Manchester perspective, renewable investment should be additional and regionally aligned, ensuring local economic and decarbonisation benefits.

Data centres can:

• Support new renewable generation through long-term PPAs.
• Use private wire connections to reduce grid strain.
• Combine renewables with storage to improve system resilience.

8. What opportunities do data centres offer in helping to power and heat local communities and amenities and what will be required to deliver benefits?

Greater Manchester has put particular emphasis on the potential of heat networks, identifying data centres as one of several possible heat sources that could support their development. No operational large-scale data-centre heat networks currently exist within GM, but feasibility work is underway in locations such as Wythenshawe town centre.

Opportunity

Future data centres represent a significant emerging opportunity for low-carbon heat recovery. New facilities have substantial cooling requirements. This cooling demand can produce continuous recoverable heat that is usually released into the surrounding air, which can contribute to local heat-island effects in dense urban areas.

Capturing this heat for use within heat networks therefore provides a dual benefit: it offers a consistent, low-carbon heat source for nearby housing, public buildings and commercial premises while helping mitigate local environmental impacts and reduce cooling loads for the data centre.

Data Centres can put significant strain on local electrical infrastructure and leave little capacity for the local electrification of other energy uses such as heat pumps and EV charging. Recovering heat from data centres, provides some mitigation to this challenge by effectively using the electricity twice (once in the data centre and again to provide heat).

Technical and Commercial Barriers

The technical arrangement for heat offtake is highly site-specific and depends on the cooling systems, plant layout, access constraints, and ownership boundaries. Security and operational reliability are paramount for data-centre operators and heat offtake is seldom used as the primary cooling route. A number of technical and commercial barriers will need to be addressed for future data centre heat offtake to be deployed at scale in GM:

• ̶Engagement with data-centre operators: Early engagement with operators and developers is required so that heat-recovery opportunities are discussed before designs are fixed. Without early dialogue, critical provisions for future heat offtake may be missed.
• ̶There is no obligation to install heat-offtake provisions or engage with heat-network teams: Current planning policy does not require data-centre developers to include heat-offtake interfaces, allocate space for associated plant, or engage with teams progressing local heat-network studies. As a result, opportunities can be unintentionally designed out at an early stage, making future heat recovery more complex or unviable.
• Space constraints for locating heat-network equipment: Many data-centre sites have limited spare land for heat pumps or energy-centre plant. In constrained urban settings, acquiring adjoining land may be difficult or expensive, restricting feasible connection options.
• ̶Utility congestion in dense locations: Data centres require substantial electrical and fibre infrastructure, which can saturate available utility corridors. This can leave insufficient room to install heat-network pipework without diversions or reinforcement, increasing cost and complexity.
• ̶Electrical-capacity constraints: Data centres have very high electrical loads, often absorbing most local grid capacity. Heat-network heat pumps also require significant electrical connections. Where capacity is tight, costly grid upgrades may be triggered unless responsibilities are defined early.
• ̶Load variability and commercial uncertainty: Multi-tenant colocation centres can exhibit fluctuating server loads, which affects long-term heat-availability certainty. Operators may be unwilling to guarantee heat export where load profiles are unpredictable.

Steps to Overcome Barriers

To respond to the challenges and barriers associated with this heat source, the city-region is considering several actions tohelp unlock its potential. This includes below:

• ̶Proactive engagement with operators and developers:  This could include convene sector focused engagement events, roundtables, or one-to-one meetings. Engagement with data-centre developers to embed heat-recovery considerations early in the design process. Early engagement increases the likelihood that practical heat-offtake routes are incorporated before layouts are fixed. Positive examples include the GM Heat Sources Engagement workshop delivered on 26/11/2025.
• ̶Use of planning mechanisms to secure heat-offtake provisions: GM Local Authorities could consider introducing planning conditions requiring new data-centre developments to be designed to connect, or be connection ready, to a future heat network. This would ensure that developers incorporate heat-offtake infrastructure at the outset, significantly reducing retrofit costs and preserving long-term heat-recovery opportunities.
• ̶Encouraging planning obligations that formalise engagement with heat-network teams: Planning obligations could be used to require data-centre developers to engage with organisations progressing or developing local heat-network studies. This would align data-centre design decisions with emerging network opportunities and avoid unnecessary conflicts between utility routing, plant location, and long term heat-recovery plans.
• ̶Early identification of where plant can be located: Early design coordination can establish what equipment the data-centre site can reasonably accommodate, typically plate heat exchangers. Where space is constrained, a short ambient-temperature pipe route to an off-site energy-centre location may remain viable, though this is highly project-specific and should be explored early to ensure feasibility.
• ̶Coordination on shared utility corridors: If considered during early design stages, there may be opportunities for shared trenching or coordinated utility routing between data-centre developments and future heat networks. This can mitigate conflicts in road corridors, reduce installation costs, and improve the feasibility of pipe routing close to the data centre.
• ̶Strategic coordination of heat distribution: GMCA could assume a wider strategic role in determining how recovered heat should be distributed across the city region. This may include identifying where data centre clusters could feed into emerging heat-network zones or where strategic heat mains could move heat to underserved areas, subject to feasibility.
• ̶Zoning powers: Monitor the progression of heat network zoning legislation, which may introduce powers requiring feasible heat sources to make heat available.

9. Are there beneficial or precautionary lessons to learn from the impact of data centres outside the UK?

International examples offers both positive and precautionary lessons.

Positive lessons highlight how data centres can align with climate goals:

• In the Nordics, abundant renewable energy and cold climates have made data centres more efficient and low-carbon. These countries reuse waste heat at scale – for example, Finland will pipe heat from Microsoft’s new data centre to warm up to 100,000 homes.
• Sweden, Denmark, and now Germany have similarly integrated data centre waste heat into city networks or policy, turning an environmental challenge into community benefit.

Precautionary lessons underscore the importance of planning and grid management.

• Ireland’s rapid data centre growth saw facilities consume almost a quarter of national electricity, straining the grid. This led to a de facto moratorium on new Dublin data centre connections from 2021–2025. Ireland has now imposed strict conditions – new facilities must invest in on-site generation and source 80% of power from renewables – to relieve grid pressure.
• The Netherlands also briefly halted new data centres around Amsterdam over land and power concerns, later allowing growth only in designated zones with stringent efficiency rules. Such interventions show the need to balance industry growth with sustainability and local impact.

In addition, relying on foreign-owned hyperscale data centres can leave gaps in access to computing for local needs. Ireland’s experience shows that alongside commercial data centres, governments must secure sovereign compute capacity for research and public services (Ireland is building a national supercomputer, CASPIr, and joining EU HPC programmes). Greater Manchester supports data centre expansion but advocates learning these lessons: incentivising green innovation (like heat reuse and renewables) while enacting precautionary measures to safeguard energy resilience and public benefit. The UK should prioritise the delivery economic and social value including investment in skills, innovation and affordable access to AI compute for our SME’s and research institutes.

10. To what extent will resource demands of data centres impact on other sectors with regard to competition for resources and decarbonisation?

Data centres compete directly with housing, transport electrification and industrial decarbonisation for electricity and grid capacity.

Without coordination, this risks higher costs for households and delays to other infrastructure. However, with strategic alignment, data centres can help fund grid upgrades, accelerate renewable deployment and support system flexibility.

Conclusion

With coordinated national and regional policy, data centres can support local economic growth, innovation and Net Zero objectives. Without it, there is a risk of environmental harm, limited innovation capability, and constrained competitiveness.

Greater Manchester stands ready to support the development of a national framework that aligns data centre growth with energy, spatial planning and decarbonisation objectives across the UK and would welcome the opportunity to engage on this further.