Decisions to be made as data centres move in
Scotland could lead a pivotal 21st century industry, says Seb Galastro
Few industries are growing as rapidly as the data centre sector. Fuelled by the rise of artificial intelligence, cloud computing and digital services, digital infrastructure demand is driving global investment.
Scotland is in a strong position to benefit. It generates more renewable electricity than it consumes, and exports substantial excess clean power south due to transmission network limitations.
Scotland also possesses much that other regions can’t compete with – for example, abundant water resources, extensive land, and a naturally cool climate that reduces the energy needed to run facilities.
And let’s not forget a wealth of talent. Scotland’s universities are renowned worldwide for programmes in computer science, engineering, artificial intelligence, and data science, which supports an established technology sector and highly skilled engineering workforce.
The economic opportunity could be considerable, although the full scale is difficult to quantify. Data centres provide the digital infrastructure which is driving modern business growth.
They can support construction activity, strengthen supply chains, attract investment for renewable energy projects and help justify upgrades to the electricity network. More importantly, they can foster an environment for innovation and investment across the wider digital economy.
History shows that transformative infrastructure often leads to unforeseen benefits. Railways, airports and broadband networks have all transformed economies in ways that could not be predicted when first developed. And computing infrastructure may prove no different.
Scotland possesses many characteristics that helped Dublin establish itself as a major European technology hub, including strong research skills, digital expertise, and abundant renewable energy. If these strengths are nurtured correctly, Scotland could have a significant impact on Europe’s digital landscape.
However, this opportunity comes with challenges. A single large data centre can consume as much energy as a small city, and there are reported to be 24 projects currently at various stages of planning in Scotland. Data centres can strain water supplies and the power grid, change landscapes, and generate concerns among local communities.
Questions can arise over whether scarce power grid capacity should prioritise data centres over essential societal needs like housing, manufacturing, or transport electrification. There have been calls for new developments to be connected to additional renewable generation, storage capacity and grid improvements, to improve the situation rather than simply relying on current resources.
Humility is also significantly important. The pace at which artificial intelligence is evolving is extraordinary. Improvements in chip design, cooling systems, and computing architecture have the potential to fundamentally change future requirements for energy, water, and land resources. Infrastructure that is installed today might become outdated more quickly than its expected lifespan, as the vast space and energy demands of current hardware are likely to decrease within the decade.
Decisions taken now should retain sufficient flexibility to adapt to a rapidly evolving technological landscape. Policymakers, developers, and energy suppliers must be careful not to lock Scotland into assumptions that may prove outdated sooner than expected. Renewable energy resources, technical expertise, and natural advantages create a compelling opportunity for the nation’s data centre development. But success depends on careful planning, responsible development, and public confidence. Strike the right balance and data centres could transform Scotland’s resources into sustainable economic benefits, positioning the country as a leader in a pivotal industry of the 21st century.
Seb Galastro is a Legal Director, DLA Piper