This week in UK data centres:
- Burges Salmon publishes the UK Data Centre Market in 2026 report — with CoreWeave, NTT, Savills, and Future Growth Capital as contributors — concluding that power access has become the central investment risk, the primary determinant of site value, and the gating factor for project financing
- Cushman & Wakefield’s EMEA H1 2026 update documents the shift from expansion to managed growth across 33 European markets, with FLAP-D live capacity at 3.8GW and greenfield development broadening significantly beyond established corridors
- The global modular data centre market reaches $31.24bn in 2025 on a trajectory to $116.53bn by 2034 — growth driven by AI deployment timelines and the appeal of compressing construction schedules, with the critical caveat that modular solves the build, not the grid connection
- BCLP’s Energy Nexus series addresses how to price grid uncertainty into energy contracts — and why the contract structure is now as commercially important as the connection offer itself
- The Ofgem Data Centre Commitment Fee consultation closed 16 September — the most significant regulatory event in the UK market this year moves to determination
Burges Salmon: power access is the gating factor. Not demand, not planning.
Burges Salmon published The UK Data Centre Market in 2026: Navigating Demand, Power and Opportunity this week, drawing on contributions from CoreWeave, NTT Global Data Centres, Future Growth Capital, Floral Energy, and Savills. The report’s central conclusion is unambiguous: power availability is now the central investment risk, the primary determinant of site value, and the gating factor for project financing. Demand is accelerating. The constraint is access to reliable, deliverable power.
The UK has more than 550 data centres and has set a target of at least 6GW of AI-capable capacity by 2030. The gap between that target and what is currently deliverable is almost entirely a power gap. Access to reliable and deliverable power has become the factor that decides which projects proceed — not the quality of the planning application, not the strength of the anchor tenant covenant, not the developer’s track record. Power first.
The report’s contributor list matters as much as its conclusions. CoreWeave — anchor tenant on the DataVita Lanarkshire campus — and Savills — whose H1 analysis confirmed energy as the delivery gatekeeper — are both represented alongside NTT, Future Growth Capital, and Floral Energy. Nearly half of developers surveyed by Turner & Townsend cite power access as the biggest scheduling constraint, ahead of planning, construction costs, and equipment lead times.
The Burges Salmon report also addresses the Energy Nexus model — data centres connecting directly to dedicated co-located generation and storage — as the structural response. This is the direction Linklaters documented in their Powered Land series, and that the Kao Data / Downing 40MW private wire solar deal demonstrated in practice. The report’s message is that this is no longer contingency planning for a handful of well-capitalised operators. It is becoming the primary delivery model for any project where grid timelines are incompatible with capital requirements.
Sources: Power access, not demand, will decide UK’s data centre future — Datacentre Solutions | Power availability is defining the future of AI — Energy Live News | UK data centres ambitions risk being held back by power constraints — Edinburgh Chamber | The Energy Nexus: UK Data Centres and Power Strategy — BCLP
Cushman & Wakefield EMEA H1 2026: managed growth, broadening geography, the limits of FLAP-D.
Cushman & Wakefield’s EMEA H1 2026 update, covering 33 markets, documents what the firm calls a new phase of selective growth. FLAP-D combined live capacity has grown from 1.8GW in 2019 to 3.8GW by H1 2026, more than doubling in seven years. A further 1.4GW is under construction and 2GW planned. But delivery within the established corridors is increasingly paced by grid infrastructure rather than demand.
London added 49MW in H1. Frankfurt is limited by connection lead times of 24 months or more. Paris led H1 with 72.5MW — already ahead of full-year forecast, supported by France’s nuclear capacity. Greenfield development rises from 8% to 39% of the 2026-28 pipeline, with hyperscale sites averaging 175km from a hub city, up from 46km. Capital is broadening into secondary markets not because core markets are exhausted, but because power availability in the Nordics, UK regions, and Iberia has become competitive with established corridors.
For UK operators, the C&W update reinforces the regional expansion thesis. Operational expertise and execution are increasingly more valuable differentiators than simply controlling development land. The CPP / Equinix atNorth $4bn acquisition is a direct expression of that dynamic at M&A level — pension fund capital moving to a Nordic platform where power availability and sustainability credentials have become primary valuation drivers.
Sources: EMEA Data Centre Update H1 2026 — Cushman & Wakefield | EMEA data centre mid-year 2026 report — JLL | UK data centre market H1 2026 — Savills / Estates Gazette
Modular data centres: a $116bn market by 2034, with a critical caveat about what modular actually solves.
Fortune Business Insights published updated sizing for the global modular data centre market this week. The market reached $31.24bn in 2025 and is projected to reach $116.53bn by 2034, a CAGR of 16%. Forecasts from other major research houses — Grand View at $75.77bn by 2030 at 17.4% CAGR; Straits Research at $145.35bn by 2034 at 17.2% CAGR — bracket the same structural growth story. The driver is consistent across all of them: AI deployment timelines that demand infrastructure delivered in months, not years.
The appeal of modular for AI deployment is real. Prefabricated IT pods, power skids, and cooling modules built and tested off-site compress on-site construction from 24-36 months to 11-14 months for equivalent capacity. Traditional data centre delivery runs 24 to 36 months for civil, MEP, fit-out, and integration. Modular moves integration into the manufacturing facility, enabling factory-integrated systems to land faster with fewer on-site variables. For AI training deployments where the hardware generation cycle runs 18-24 months, arriving a year earlier is commercially significant.
The critical caveat — stated plainly in the most useful analysis of the market published this year — is that modular compresses the part of the timeline you control. It does nothing to the part you do not, which in 2026 is grid power. An 11-month modular build does not change a 4-year grid connection queue. Teams that treat modular as a route around the grid constraint simply move the delay from the construction schedule into the interconnection queue.
The genuine workaround — and the direction the market is moving — is pairing modular construction with on-site or co-located power generation: gas turbines, fuel cells, hydrogen, or hybrid arrangements with battery storage. This is why prefabricated power skids are selling as fast as IT pods. The modular data centre that can energise on its own schedule, rather than the grid operator’s, is a fundamentally different proposition from one that is still waiting for a DNO connection offer.
For UK operators and developers, the modular market growth is relevant in two ways. First, as a deployment model for AI workloads where time-to-capacity is the primary commercial variable and an alternative power strategy makes grid independence viable. Second, as a site qualification criterion: sites with adjacent land suitable for modular deployment alongside co-located generation are now materially more valuable than equivalent sites that depend entirely on a grid connection for power.
Sources: Modular Data Center Market Size, Share, and Growth 2034 — Fortune Business Insights | Modular Data Center Market Size, Share & Growth Report 2030 — Grand View Research | Modular data center approach: fast-track AI growth in months — Progressive Robot | Prefabricated modular data centre solutions for AI, cloud, and edge infrastructure — Flex | Modular Data Centres UK — DCNN Magazine
BCLP’s Energy Nexus: the contract structure is now as important as the connection.
BCLP’s Energy Nexus series continued this week with analysis on pricing grid uncertainty into data centre energy contracts. The Energy Nexus framing positions data centres as integrated energy platforms that must manage power procurement, generation, storage, and contractual risk simultaneously. As AI and HPC push campus demand into the hundreds of megawatts, the power supply agreement has become as significant as the grid connection offer.
Fixed-price power agreements are no longer adequate for AI-scale campuses. Modern PSAs need indexed models with collars and caps, hedging instruments, robust force majeure provisions calibrated to network constraints and regulatory interventions, and clearly defined SLAs for uptime. Burges Salmon’s investment-side analysis converges on the same point: capital is being deployed ahead of secured grid connections, requiring structures that absorb prolonged uncertainty — joint ventures, extended long-stop dates, enhanced information rights, and calibrated exit provisions.
The BCLP series and the Burges Salmon report are addressing the same structural reality from different angles — one from the contract, one from the investment thesis. Grid uncertainty is no longer a project risk to be disclosed in an information memorandum. It is a feature of the market that has to be designed around, contracted for, and priced into every transaction.
Sources: The Energy Nexus: structuring integrated power and data centre infrastructure — BCLP | Mastering powered land transactions for UK data centres — BCLP | From grid risk to green light: structuring data centre investments in 2026 — Burges Salmon
The Ofgem commitment fee consultation closed on 16 September. Determination now underway.
The Ofgem Data Centre Commitment Fee consultation closed on 16 September 2026. The proposals — a fee of between £237,500 and £712,500 per MW, with mandatory milestones on financial capability, planning progress, and committed end-user demand — have been the most significant regulatory development in the UK data centre market this year. Ofgem now moves to determination.
The outcome will shape the UK grid connection market for the rest of the decade. If the committed end-user demand criterion is adopted substantially as proposed, the speculative development model that has produced much of the queue inflation becomes structurally unviable. The projects remaining in a shorter, more credible queue will be precisely those that the Burges Salmon and BCLP analysis this week identifies as the new market standard: confirmed power, contractual demand, and capital structured to absorb connection uncertainty.
Sources: Ofgem acts to free up grid capacity by tackling speculative data centre projects — Ofgem | Pay to Stay: Ofgem’s plan to cull the data centre connection queue — Slaughter and May | The Ofgem Data Centre Commitment Fee: what operators need to do — Armason
The week in one line: Burges Salmon — with CoreWeave, NTT, and Savills as contributors — confirmed power as the central investment risk and gating factor; Cushman & Wakefield documented managed growth and broadening geography across 33 EMEA markets; the modular data centre market hit $31bn globally on a trajectory to $116bn, with the market now clearly understanding that modular compresses the build timeline, not the grid queue; BCLP addressed the contract structures required to manage grid uncertainty at scale; and the Ofgem consultation closed, with determination underway on the mechanism that will reshape the UK grid queue for the rest of the decade.
Armason tracks infrastructure signals across the UK and European data centre market. For site availability, grid intelligence, or pipeline advisory, visit armason.co.uk.
Related reading
· UK Data Centre Intelligence — Week Commencing 7 September 2026
· The Ofgem Data Centre Commitment Fee: what operators with grid positions need to do
· Why most UK data centre pipelines fail before they complete
· Data centre site selection in the UK: the new sequence in a power-first market
