Across semiconductor fabs, life sciences developments, and high-tech industrial projects, developers are facing a new reality.
Utility availability has emerged as a strategic, and major constraint for those looking to deliver mission-critical and high-tech industrial projects.
Developers’ struggles to access utilities are not new, but while this bottleneck has continued unresolved, the number of projects competing for access has grown exponentially.
The UK’s infrastructure pipeline has expanded rapidly, driven by both public and private sector initiatives, from transport, energy and grid to AI, cloud computing, pharmaceutical and manufacturing R&D. Therefore, the constraints are likely to intensify, and so a solution is increasingly urgent.
Power availability has emerged as the most significant constraint for UK data centre developments, with more than 75 percent of operators identifying it as their primary challenge. Last year, data centres were officially designated as part of the UK’s ‘critical national infrastructure.’ These facilities are essential for supporting AI, cloud computing, and the government’s newly established AI Growth Zones. As such, it is vital that data centres have reliable access to the utilities they require to operate effectively.
Data centre energy use is projected to more than double by 2030 from today’s 2.5% of national demand. Some estimates go further, suggesting consumption could quadruple. Meanwhile, UK operators face energy costs up to four times higher than the US, with the added complication of long grid connection delays.
Life sciences projects face similar risks, with grid connection delays and water shortages threatening timelines as companies transition toward electrified, AI-enabled R&D environments. Likewise, gigafactories, central to the UK’s net zero strategy, add to pressure on already constrained electricity and water networks.
Key policy changes
To tackle the power concern, the government has launched the ‘Great Grid Upgrade,’ along with reforms to grid connection policy. The UK is transitioning from a ‘first-come, first-served’ model to a ‘first-ready, first-needed, first-connected’ system, which prioritises shovel-ready projects.
Another shift will see projects required to progress through a gate-based queuing system. Gate 1 will involve an indicative connection, while Gate 2 will confirm both readiness and strategic alignment in order to secure grid access. This will accelerate connections for those projects that are most important and ready to begin construction.
Water availability in the UK is becoming an increasingly pressing concern, particularly for sectors such as data centres and life sciences that require substantial volumes for cooling and operational processes. While the UK has a temperate climate, certain regions are already experiencing water stress, prompting the Environment Agency to call for improved reporting and greater efficiency in water usage. Developers are therefore encouraged to forecast demand and explore alternative cooling technologies to mitigate potential shortages.
For developers, this means energy and water availability has shifted from being post-design considerations to a critical, determining factor in project planning. Prioritising utility-rich locations must be the order of the day, even if it challenges traditional land valuation models. The 2026 Strategic Spatial Energy Plan will play a pivotal role in helping to identify these locations and thus shape the future of industrial development across the UK. The objective of this plan is to direct investment in grid infrastructure to areas where it will have the greatest impact on supporting mission-critical sectors such as semiconductor manufacturing, life sciences, and high-tech industries.
Powering up solutions
Where potential sites are constrained, developers may need to consider investing in on-site renewable energy generation and battery storage to reduce reliance on grid connection timelines. Alternatively, developers could focus on securing long-term Power Purchase Agreements (PPAs) at the outset of a project. By partnering with energy providers through PPAs, especially as government support expands to the corporate PPA market, developers can obtain guaranteed access to clean, affordable electricity and hedge against energy price fluctuations. In contrast to direct investment in on-site solutions, this approach offers price stability without the need for significant upfront capital outlay on infrastructure. Additionally, developers might explore the adoption of emerging technologies such as hydrogen fuel cells and small modular nuclear reactors to bolster long-term energy resilience, setting their projects apart from those that depend predominantly on traditional grid or renewable solutions.
Water efficiencies
Water availability presents a parallel challenge. Beyond its use in energy-intensive cooling systems, water is also crucial for tasks such as wafer rinsing in semiconductor manufacturing and for cleaning, sterilisation, and formulation processes in life sciences production. As noted earlier, the Environment Agency has already flagged transparency gaps in water usage reporting and is urging greater efficiency, particularly in regions experiencing stress. Without changes in practice, these issues risk becoming pressure points that could hinder future growth.
To manage water needs effectively, developers should adopt a holistic approach that includes regular auditing of water usage to identify inefficiencies and opportunities for recycling. Implementing closed-loop water systems can significantly reduce consumption by recirculating water within the facility, while rainwater harvesting offers a supplementary source for non-potable applications.
Engaging with local water suppliers at an early stage will help secure adequate supply and ensure compliance with regional water stress policies. Furthermore, investing in advanced filtration and purification technologies allows facilities to reuse greywater for cooling and cleaning, thus easing pressure on mains supplies. For life sciences operations, integrating water treatment solutions tailored to specific cleanroom and product requirements can both ensure quality standards and support sustainability goals. Finally, transparent reporting and benchmarking against industry best practices will not only satisfy regulatory expectations but also drive continuous improvement in water stewardship.
The UK’s 2025 Industrial Strategy rightly positions infrastructure as a driver of economic growth. But to realise the potential of these mission critical sectors, utility planning must move from the margins to the mainstream. Government reforms, from NSIP fast-tracking to grid queue reform and Clean Power 2030, are creating new opportunities for shovel-ready projects. Those who embed forward-thinking, integrated energy and water strategies from day one will be best positioned to deliver resilient, future-ready assets that align with both national priorities and global demand.
Utility constraints do not need to slow your development pipeline. Connect with Linesight teams to review site options, grid connection pathways, and other utility management strategies that support longterm resilience.
