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Data centres are increasingly being seen as essential for economic growth, yet their rapid expansion raises uncomfortable questions about fairness and public value. As communities are asked to give up land, water, energy and environmental capacity to host them, we must ask whether the benefits are being shared fairly, or whether data centres are becoming the latest example of an extractive economic model that takes more from places than it gives back.
The rise of data centres has been hard to ignore. They are now estimated to consume around 6% of electricity supply in the UK, with Ofgem suggesting that there could be around 100 GW of data centre projects in the connection queue – more than the UK's current peak electricity demand. The scale of this growth is unprecedented, driven largely by the global race to develop and deploy AI.
Governments around the world have embraced data centres, tying them to ambitions of economic growth, technological leadership and AI rollout. Ofgem now refers to AI data centres as ‘strategic connections’, while last year Angela Rayner overturned local council planning decisions on data centre development, citing their importance to the government’s growth push.
The assumption is that more data centres mean more progress. But at what point does this digital infrastructure begin to function as a system that extracts value from places rather than helping to build it?
These developments require vast amounts of land, electricity and water. Some consume as much as 50 times more electricity per square metre than a typical commercial building. To secure that electricity, data centres are increasingly competing for constrained grid capacity, contributing to delays for other developments, including new housing, and putting additional pressure on an already-stretched energy system.
Challenges in securing a timely grid connection have pushed more than 100 data centres in the UK to seek gas connections, for either temporary or permanent supply. For years, the energy transition has been framed as a collective effort to reduce emissions and improve energy security. We are now seeing a fast-growing source of electricity demand driving renewed interest in fossil fuel infrastructure.
But what makes data centres different from other forms of development competing for those same resources, such as housing developments, factories, or even renewable energy generation?
New housing developments provide homes; factories provide local jobs and investment; renewable projects contribute to decarbonisation, energy security, and, increasingly, community ownership and benefit. While there can still be adverse impacts from these developments, there is usually a visible relationship between what communities give up and what they receive in return.
By contrast, some industries operate via a simple imbalance: they extract value from a place, generate profits elsewhere, and leave local communities to absorb a disproportionate share of the environmental and social costs. The current wave of data centre development is being driven by some of the largest and wealthiest corporations in the world, supported by extraordinary levels of investment in AI. Analysts at Morgan Stanley, the US investment bank and fifth biggest financier of fossil fuels, estimate that global spending on data centres will reach nearly $3tn by 2028, covered by the cashflow of big tech companies and private credit. The UK data centre market alone was valued at £8bn in 2023 and is set to grow to £13bn by 2032. The value generated by that infrastructure will, however, largely accrue to shareholders, investors and technology companies, operating at a global scale.
At the same time, data centres are leaving communities with relatively few permanent jobs and limited local benefit. In New York, a JPMorgan data centre expansion recently received $77m in tax incentives while creating just one permanent job. In the UK, Action to Protect Rural Scotland has released a report comparing the job-creation claims of developers planning hyperscale data centres in Scotland with data gathered from global data centre development. Their analysis found that it took $33m of investment into data centres to create one permanent job – more than 10 times the amount of the utilities sector, which was the next most expensive sector for investment per job created, at $2.2m each.
Communities living near data centres have also raised concerns about noise from cooling systems, fans and backup generators, alongside concerns about water consumption and local environmental impacts.
In Potters Bar in Hertfordshire, residents have opposed plans for a £3.8bn cloud and AI data centre proposed on greenbelt land, describing the site as the lungs of their community. Similar opposition is emerging across the UK, Europe and North America. The growing number of planning challenges, moratoriums and community campaigns suggests that opposition is not simply about individual developments; it reflects a deeper unease about who benefits from the AI infrastructure boom and who is expected to absorb its costs.
These questions are well established within discussions about a just transition. We recognise that energy infrastructure should not simply be judged by how much power it generates, but by the wider social value it creates. Every new development presents an opportunity to tackle poverty, inequality and social injustice. However, this framing is notably absent from the discussion around data centres.
As data centres become an increasingly significant feature of both the energy transition and the UK’s industrial strategy, we need a more honest conversation about the value they create, who captures that value and who pays the price.
Some proposals have already been put forward as to how data centres can provide greater value locally. As part of London Climate Action Week, 40 mayors signed a landmark global agreement on AI infrastructure, committing to work together to ensure data centres support communities, strengthen clean energy systems and deliver local benefit. Data centres can also be used as an enabler of other low-carbon infrastructure, helping fund grid network reinforcement and supplying waste heat to heat networks.
Decisions about data centre development cannot be made on technical and economic grounds alone – they must consider the inherent injustices that are arising. Who benefits, who bears the costs, who gets a say, and how can we redress the balance of value?
The challenge is not simply how we power the future, but who that future is being built for. Because if the infrastructure underpinning the AI economy relies on communities giving up land, resources and environmental capacity, then those communities deserve more than promises of future growth; they deserve a fair share of the value being created and a voice in the process.
