The Substation Test: How London Boroughs Are Weighing Data Centre Applications

On any given planning committee agenda in London this autumn, the vocabulary is familiar: outline applications, reserved matters, conditions and Section 106 agreements. What is less familiar is the subject. Proposals for data centres — warehouses of servers, cooling plant and electrical equipment — are arriving with greater regularity at town halls across the capital. The cloud, it turns out, needs land, cables and a local authority's consent.

The shift matters because data centres are no longer solely a matter for national infrastructure policy or the boards of technology companies. They are local planning decisions, taken in public, with ward councillors weighing evidence about electricity demand, water use, noise and the character of employment land. The question is not whether London needs digital capacity. It is where that capacity should go, who should bear its costs, and which public body has the leverage to shape it.

The application on the desk

A data centre is, in planning terms, an industrial building with unusual appetites. It may look like a distribution shed from the outside, but its demands are different: substantial electrical connections, continuous cooling, backup generators and, in many designs, significant water consumption. Those demands do not map neatly onto the categories councils usually use to judge employment schemes.

Boroughs are therefore finding themselves in a familiar but uncomfortable position. They are told that the national case for cloud capacity is strong, that the site is brownfield land, and that the scheme will support jobs. They are also told by residents that the building will hum through the night, that the local substation is already stretched, and that the promised jobs are few relative to the footprint.

The planning system is where those claims meet. Officers must assess transport, amenity, design and environmental impact. Councillors must decide whether the public benefit outweighs the harm. Neither task is straightforward when the core product — computing — is invisible and the core infrastructure — power and water — is largely controlled by others.

Grid, water and the limits of permission

Perhaps the most important constraint on London's data centre boom is not a planning policy but a connection queue. The capital's electricity distribution network, like much of the country's, faces pressure from new demand. A council can grant planning permission, but it cannot conjure a substation or speed up a grid offer. That creates an uncomfortable gap between the decision on the desk and the infrastructure on the ground.

Water is a similar story. Data centres use water for cooling, though the amount varies widely with design. In a city that has long worried about supply and leakage, planners are increasingly asking for details of water efficiency and, where relevant, assurances about the discharge of heated water. Thames Water's own difficulties have made those questions sharper. A planning condition can require a drainage strategy; it cannot guarantee that the local network performs as promised.

This is where local decisions become partly declaratory. A borough may approve a scheme that is technically acceptable but practically dependent on upgrades outside its control. Councillors know this, and it shapes the conditions they attach: phasing, caps on connected load, requirements for efficient cooling, and sometimes financial contributions towards local infrastructure. The permission is local; the delivery is networked.

Noise, diesel and the neighbourhood test

The objections that surface most often are not abstract. They concern the sound of cooling fans, the testing of diesel generators, the sight of a large industrial building on the edge of a residential area, and the loss of land that might otherwise have been used for something else. In boroughs such as Hillingdon, Havering and Barking and Dagenham, where land values and logistics pressures are already high, these arguments carry weight.

The diesel question is particularly sensitive. Backup generators are essential for resilience, but their testing regimes can create intermittent noise and air quality concerns. Councils can impose conditions on operating hours and maintenance schedules. They can require acoustic enclosures and landscaping. What they cannot do is make the underlying need for backup power disappear. The result is a negotiation over mitigation rather than a simple yes or no.

There is also the employment argument. Data centres create some permanent roles, but they are not labour-intensive employers. For councils under pressure to deliver jobs and business rates, the calculus is not obvious. A scheme may bring investment and rate income while offering relatively few local jobs. That trade-off is now being tested openly in committee rooms.

Who actually decides?

The national picture matters. Data centres were designated as critical national infrastructure in 2024, and ministers have signalled that larger schemes may increasingly be treated as nationally significant. For the smaller and mid-sized proposals that reach London boroughs, however, the decision remains local. That means the capital's digital footprint is being shaped by a patchwork of planning committees, each applying local plans, London Plan policies and their own judgment.

This is not a simple story of councils blocking growth. Many boroughs want to attract technology investment and recognise the need for digital infrastructure. But they also want to protect amenity and ensure that the costs of new infrastructure do not fall entirely on existing residents. The planning system gives them tools to negotiate, but not always the power to determine the wider utility landscape.

The result is a shared authority. Ministers set the strategic direction. Ofgem and the network operators govern connections. The Mayor's office sets London-wide policy. Borough councillors decide individual applications. Residents and campaign groups shape the terms of debate. No single actor controls the outcome, which is precisely why planning committees have become the arena where the capital's data centre questions are most visible.

A digital map drawn locally

What happens in London's planning committees over the next few years will leave a physical mark on the city: substations, cooling plants, cable routes and industrial buildings that will outlast the companies that commission them. The decisions will also reveal something about local government's capacity to shape infrastructure that is often described as national or global in scale.

Data centres are not uniquely controversial, but they concentrate a set of tensions that London already faces: constrained land, strained utilities, noisy industrial activity near homes, and the difficulty of translating national economic priorities into local consent. The cloud may be abstract. Its planning consequences are not. And they are being settled, application by application, in the boroughs.