Inexperienced vitality microgrids hailed as cost-effective reply to UK’s datacentre vitality provide woes

The federal government ought to think about increasing the supply of renewable microgrids as a less expensive and sooner different to constructing nuclear small modular reactors (SMRs) to satisfy the vitality wants of datacentres, in accordance with the Centre for Web Zero (CNZ).

The federal government is championing the usage of nuclear small modular reactors (SMRs) as a doable reply to shoring up the nation’s vitality provides, as a part of its push to get UK vitality grids operating on clear vitality by 2030.

Nonetheless, the CNZ, which is a analysis institute targeted on predicting future vitality calls for, mentioned its evaluation reveals that increasing the variety of renewable microgrids throughout the UK might provide a sooner and cheaper manner of assembly the rising vitality wants of the nation’s burgeoning variety of datacentres.

“The UK is at present host to 523 datacentres, the third-highest of any nation globally, with no less than 9 extra in improvement. The nation is at present deciding energy its datacentres of the long run – and at what velocity,” mentioned the CNZ. “Because the UK seeks to develop its AI sector within the context of the Clear Energy 2030 goal, CNZ’s analysis signifies that renewable microgrids might meet the bulk of a big datacentre’s electrical energy wants.”

Microgrids usually generate electrical energy with the assistance of renewable sources, which is then saved in battery packs till it’s wanted, and are operated independently of primary electrical energy grids. They can be utilized to energy single buildings, or blocks of them might be knitted collectively to produce energy to large-scale developments.

“The UK must construct 5 occasions extra transmission infrastructure within the subsequent 5 years than was constructed within the final three many years, which will likely be a prolonged and costly course of,” mentioned the CNZ. “This makes circumventing the grid and connecting on to new sources of energy, through microgrids and personal wires, more and more interesting – particularly since fastened prices to construct and preserve the grid are loaded onto shopper electrical energy payments.”

In its analysis, the CNZ sought to look at whether or not renewable microgrids might constantly meet the excessive demand for vitality from datacentres, and the way their efficiency stacks up in opposition to SMRs, by way of price, velocity and carbon affect.

It did this by analysing three situations for powering a 120MW datacentre. The primary concerned utilizing nuclear SMRs, and the second used a microgrid comprising offshore wind and photo voltaic with battery storage, with small quantities of fuel for supplementary assist. The third choice concerned the usage of a microgrid that lacked a provide of photo voltaic vitality in a land-constrained situation. Its evaluation discovered that it’s roughly 43% cheaper to energy a 120MW datacentre with renewables and small quantities of fuel than with a nuclear SMR. 

“A microgrid comprising offshore wind, photo voltaic, battery storage, and fuel supporting, could be 43.4% cheaper to run yearly in comparison with procuring energy from a nuclear SMR. The price saving falls barely to 42.1% if you happen to take away photo voltaic technology,” mentioned the CNZ.

“A 95% renewable microgrid with fuel backup – the aim for Clear Energy 2030 – was modelled at nearly a 3rd (31.7%) decrease price than the SMR case in immediately’s costs. In future, greater use of renewables will grow to be much more cost-competitive if know-how and storage prices proceed to fall in comparison with fuel.”

The CNZ mentioned its analysis additionally confirmed that renewable vitality sources can meet 80% of a datacentre’s calls for over the course of a 12 months, however fuel is required as a stopgap to attain essentially the most cost-optimal mannequin of powering a datacentre with battery assist.

“Greater volumes of batteries would scale back the reliance on fuel energy – that is prone to occur over time as prices [of batteries] fall,” mentioned the CNZ. “Equally, constructing extra renewables (offshore wind and photo voltaic) would assist microgrids meet much more datacentre demand.”

The analysis follows the findings of a ballot of FT 250 executives, revealed by the Vitality Networks Affiliation (ENA), which expressed misgivings concerning the future prosperity of the UK’s digital financial system if {the electrical} grids underpinning the nation’s datacentres usually are not urgently upgraded.  

In response to the UK authorities’s personal figures, home datacentre capability might rise to between 3.3GW and 6.3GW by 2030, primarily as a result of rising demand for AI workloads, which can place additional strain on the grid.

Ramping up the supply of SMRs is being provided up as an answer in the long run, because the UK additionally grapples with its bid to grow to be a clear vitality superpower. In June 2025, the federal government confirmed that it had commissioned Rolls-Royce SMR to construct the nation’s first SMRs, that are anticipated to be linked to the grid a while within the 2030s. 

Within the meantime, the Nationwide Grid has additionally dedicated to including extra capability to the grid – together with not too long ago on the outskirts of Larger London – the place a excessive proportion of the nation’s datacentres are positioned.

The Nationwide Grid has additionally not too long ago introduced a partnership the place AI could be used to flexibly alter how a lot energy AI datacentres draw from the grid, as a part of a push to scale back the burden these amenities placed on UK energy provides.

Izzy Woolgar, director of exterior affairs on the CNZ, mentioned the analysis highlights the position that renewable applied sciences might play in serving to the UK swiftly meet the vitality calls for of its rising datacentre sector.

“There may be probably £44bn on the desk for the UK financial system from datacentres over the subsequent decade, and the window of alternative is slim to make key choices for our vitality and digital future,” she mentioned.

“Whereas nuclear SMRs could play an vital position within the UK’s future vitality combine, our evaluation suggests renewables provide a cost-competitive, confirmed answer for assembly new vitality demand within the quick time period, within the context of our clear energy ambitions.”