Tag: South Mimms

DC01UK: data centre drama

It’s a few months since we learnt that Europe’s biggest data centre might be built here in Hertsmere – what could stop it from happening?

In part three of our DC01UK deep dive we’ll look at the various obstacles that must be overcome before it goes live on the Internet in 2030.

Five ducklings in a row on a white table, walking across the frame right to left.

It might fall at the first hurdle. The scheme has outline planning permission from Hertsmere Borough Council so the developers must get their ducks in a row and submit a final plan. If we’re honest, though, this doesn’t look like a major concern: the council has given the project its enthusiastic backing and the UK government has cleared the way by adding data centres to the list of developments that can be defined as nationally significant infrastructure projects, alongside energy, transport, water, waste water, and waste projects (Technology Secretary Peter Kyle has even mentioned DC01UK in a speech). Unless something else goes wrong, the project is probably guaranteed to happen. So what else could go wrong?

Hertsmere MP Oliver Dowden stands in a field with a group of Potters BAr residents who are objecting to the construction of a new data centre in the area

The neighbours might object. As with any big development – especially one planned for land that is 100% in the green belt – local people are upset about DC01UK and have begun a campaign. Sadly for the locals, though, this scheme is going to be very hard to stop. As we said in an earlier post, this is the kind of land Angela Rayner calls ‘grey belt’ and even the green belt lobby seems to have given up. Our MP has met with the local campaigners but it doesn’t sound like he was able to give them much hope: “I encourage residents to submit their own views on the matter directly to the council,” he says. The fact that the developers plan to leave half the land as green open space and have promised substantial enhancements to the local environment will not help the opposition’s cause.

Blue whale logo and logotype for Chinese AI firm Deepseek

The demand might not be there. The trigger for DC01UK – and hundreds of projects like it all over the world – was the massive surge in demand for data centre capacity that we wote about in our first post, almost entirely the product of the AI and machine learning revolution – apparently an unstoppable and unarguable fact of the modern world. But the launch, only two months ago, of a new large language model (LLM), from a Chinese firm called Deepseek, suggests the direction for AI might not be quite as ‘up and to the right’ as had been hoped by investors. Deepseek wasn’t supposed to be possible. American sanctions have stopped the sale of the latest versions of the specialist chips needed to train and run serious LLMs to Chinese firms. Deepseek was trained on chips from the top manufacturer NVIDIA but these chips had been deliberately downgraded so as to slow Chinese progress in AI. That a group of brilliant computer scientists was able to coax top-tier AI performance from second-tier hardware suggests that this might not be the brute-force business we thought it was to begin with.

The Deepseek engineers made such resourceful use of the hobbled chips’ capacity that they were able to get around the punitive sanctions regime and keep China in the AI game. And, more to the point, if one Chinese firm can make more efficient use of AI hardware then the American giants, then so can anyone. Suddenly the AI game doesn’t look so one-sided and the soaring demand for newer and faster hardware doesn’t look so nailed-on. If more really can be done with less, then maybe the world doesn’t need the vast additional computing and data centre capacity that’s now being built. So do we think that the spreadsheets that justified DC01UK’s grand plans have been dragged to the trash? No, we don’t. The underlying growth in demand for the kind of cloud services that run in data centres like this one is unabated – and most of it has no need of LLMs – but has the gloss come off the AI data centre business? Just a bit. We’d like to have been a fly on the wall in a post-Deepseek DC01UK planning meeting that’s for sure.

A vivid, graphical splash of water moving left to right through the air

It’s the water stupid. In our previous post we wrote about the extraordinary demands that a data centre on this scale makes of resources like electricity (to power the servers) and water (for cooling). The power is, apparently, already sorted. The water, though, may not be so straightforward. Our region, the East of England, is already classified as ‘severely water stressed‘ and environmental groups calculate possible daily shortages of up to 800,000 litres by 2050. We’ve calculated that DC01UK alone will need 250 million litres per year (660,000 litres per day) to keep its servers cool. Where will this vast quantity of water come from? In fairness to the developers they may be considering an approach to DC01UK that doesn’t need any water at all – at least not after the initial top-up. It’s possible to build a server farm with a ‘closed’ cooling system that recycles the cooling water used – condensing it after it’s evaporated and pumping it back through the system (Microsoft is testing this approach). It’s not easy, though, and you need to engineer your data centre from the ground up to take advantage of this approach, pumping water right through the computers to cool the chips directly. There are even more advanced solutions – like the one from Google’s parent company Alphabet that will site a direct air capture facility next door to your data centre, producing CO2 to be stored forever underground and clean water that can be used to cool the servers. Magic. But very expensive. And a relatively small firm like DC01UK probably doesn’t want to be adding cost to a low-margin business like a data centre if they don’t have to. Where will the new data centre get its water? And, as shortages bite, will DC01UK just dry up all together?

Black dog running across a meadow full of flowers

The money. Obviously. The companies behind DC01UK are not the final operators and won’t be funding the project. Can they guarantee the billions of pounds necessary to get a fitted-out, ready-to-launch DC01UK to market in 2030? Of course not. So this comes down to who is actually providing the money and to the absolute forest of unknowns – global recession, soaring borrowing costs in the UK, a tech crash that crushes demand – that might bring the thing to a grinding halt and leave that nice dog-walking field in South Mimms just as it is now.

US President Donald Trump walks toward the camera holding up his hand in front of him perhaps in greeting. Alongside him many flags including a stars and stripes

Then there’s Donald Trump. This one’s tricky. Will a new worldwide trade framework be a good thing or a bad thing for a UK data centre? We don’t think anyone knows right now and there are many contradictory factors. We think, though, that this global re-arrangement could actually be a good thing for DC01UK – and for firms like it outside the USA. Services – like those provided by DC01UK to big corporations – are not covered by the new American tariffs. That has to be a good thing in itself: the biggest national customer for data centre services is the United States by about a mile and worldwide data centres will be able to continue selling their capacity to American firms on the current terms. Since the physical location of a data centre is important – you want your servers to be close to your customers to reduce latency – local facilities like DC01UK will continue to be important.

The hardware that goes into data centres is, as you’d expect, mostly made in the far East. NVIDIA’s AI chips, for instance, are made in Taiwan – and US tariffs have been applied there. It is possible that the hike in price for these products in the USA could be beneficial to firms in the rest of the world – if there’s a sudden oversupply of hardware made in China, South Korea, Taiwan and Japan a glut of unsold kit could cause prices to drop here. Fitting out DC01UK could turn out be cheaper than planned. This fear of ‘dumping’ by lower-cost countries is putting the fear of God into UK manufacturers but since no computer hardware is made in Britain, this cannot be a concern. Although it’ll obviously be a years before any computers are purchased for DC01UK, it’s just possible that the geopolitical chaos unleashed by Donald Trump will turn out not to be an obstacle at all but, in fact, an advantage.