Cast from your mind a picture of data centres as a series of bland steel boxes clustered on the edge of a trading estate. This is a sector driving a modern day industrial revolution across the UK. Local authorities are welcoming the data centre operator into their community for their. Halo effect jobs training. Wealth. What does this mean for the data centre industry? How do we quantify the value they bring and can we extend this to how they support net zero communities to shine a light on why data centres matter and explore how we can capture and reuse their waste heat to sustainably fuel the energy demands of local communities? I'm joined by James Donner, Development economics director for Stantec, assessing the economic case for development opportunities across the UK, and Steven, Milady and MEP, Director with Stantec, and our lead on mission critical for. Realities and later we have an exclusive interview with Emma Fryer, Director of Public Policy for Europe for Cyrus 1A Large Scale Co location developer and operator of data centres to stay with us. For that, I'm Graham Monday. Welcome to the scope of podcast from Stantec. A global leader in sustainable engineering, architecture and environmental consulting. Stephen data centres have quite recently been classified as critical national infrastructure by the government and the message from government is loud and clear, and we need more of them. In terms of where these facilities can be built, that's quite a complex question, but. Does it mean that the industry is looking beyond the usual places? The reference I made at the start business parks and and rural areas may be how big a change is this?
I think there's a lot of change happening in the industry. Currently there's a lot of engagement with a wider stakeholder group. We're seeing a lot of change and reform from a planning person. Of. Kier Stammer announced the recent AI opportunities action plan, which is a bold road map towards putting the UK as a global lead in in terms of AI. And we're going to see billions of pounds worth of an investment in the sector as a result of that. And but moving forward, I think there is a different approach. You know some people have likened this boom and this growth similar to the logistics. Place, but I think people need to realise that it's very different. There's very different requirements, so we might be building large grey boxes, but there's large power requirements, there's large connectivity requirements and we don't have the same sort of traffic flow in and out of these sites that the logistics spaces are used to. So we need a different approach to these type of buildings. We need to be more innovative in terms of our architecture to hide the extent of plant that goes with these buildings and so it's going to be interesting moving forward to watch the industry change and adapt to these. Environment. But I think as a whole there's huge opportunity for local community and the country which one, Sir James will touch.
On to, yeah. So let's, let's unpack some of that now, particularly starting with the the economic growth aspect, James as well. You know, that's kind of why the government is backing this so strongly. What? Might come as a surprise to people. It's a a relatively small number of people work in one of these buildings, but the impact is much greater than that, isn't it? Talk us through some of that.
Yes, that that's right. It it is OK. It's critical. National infrastructure, it's critical economic infrastructure. It's not just about the data centre itself, it's about the growth that that enables nationally and regionally. Tech UK in their recent evaluation, said that almost every job in the UK is reliant on a data centre. They said that it is the backbone. Of the UK economy and in fact, many sectors, simply couldn't function without it. That that's how. Important it is so wealth creation, jobs, productivity, all enabled by data centres in the context of the UK suffering from a significant flatlining of productivity over the last decade or so. And and whilst the data centre might employ. Say 90 people directly, there are hundreds of jobs involved in construction and fits out of those data centres, often over several years. There are demands on Mechanical Engineers, electrical engineers, people who understand Internet of Things, project managers, designers, etcetera. So it is supporting jobs across the economy and it is enabling growth of the UK economy and that's the key and that's the message we need to get as clearly understood as possible.
And if I can put you on the spot there slightly, do we have some numbers that we could we can put to any of that in terms of examples?
Yes. So we we well, research tells us that. A data centre can cause you a new data centre can contribute about 470 million GBA per annum, so we would say typically that's a 50 MW data centre, say 1 building over about 50,000 square metres. And it would support, apart from the 90 jobs within the data centre itself. Few 100 jobs in the local area because of people working there, buying services, produce, et cetera locally in restaurants and such like. But but then the real prize is the 5000 or so jobs across the wider economy in a range of different sectors. Such as financial services, professional services, ICT, media broadcasting, etcetera. So it's supporting. Vast amounts of the economy and that reflects the the, the, the tech UK view of the.
World and in some of the work you've you've done as well have have all of local authorities in particular begun to understand this as well and recognised this. I think we're recording this in the in the in the spring of 2025, there's already been a couple of interesting news stories. From the northeast and more recently, Anglesey, about potential data centres and data centres coming, and you've got the sense from the interviews of the local authorities have recognised the value this can actually bring to their economy.
More.
Yes, I I think a couple of years ago there was, there was fear and concern. That data centres were displacing other activities and I think 2 two things have happened. Firstly, there's an understanding that this is the new economy and that actually it isn't displacing anything. It's it's where the economy is going and there's an appreciation of the wider impacts on the on the economy. And and the significance of the effects. On local areas as well, so other industries, very productive industries that tend to cluster around areas with a lot of data centres and and the opportunities for younger people in particular to improve their skills, gain qualifications and ultimately work in that. With those operators in the data centres or for them?
I mean, when we talked, I remember offline about this, we talked about actually it's quite a highly skilled, highly quite highly paid jobs relate to this as well and and a local area can benefit from that hotel rooms etcetera. In terms of people coming in needing to stay, all of these things, bolstering the economy.
Yeah, definitely. I think there's a, particularly during the construction phase, there's a lot of people and the fit out stage, there's a lot of people coming to site umm from a consultancy perspective, engineers commissioning installers and and and in large numbers they those people. And places to stay to eat. And that brings a lot of. Yeah, to the local economy.
Learning and skills as well. If one of you can touch on that for me too, the the operators themselves are investing quite a lot in.
That, aren't they they? I yes, they they are. And. And so there's a very good example in in West London University Technical College, Heathrow. Offers digital digital futures programme for. Students year 10 to 13, so 14 years up, they're they're there to to, to engage in a B.Tech Level 3 or a levels in becoming engineers to work in data centres, but the programme. Is delivered by operators and placements are available with operators. So students are going through that programme. They're getting first hand experience from operators, learn learning about mechanical engineering, electrical engineering, etcetera, and then they're going on to do high qualifications and the evidence is showing that after that, they're getting into those jobs within those. Operators so and I think it's it's the investment in in the time you know people from those operators actually going in there and teaching year 10s it's it's fascinating and fantastic.
Yeah. I mean, we're seeing a lot of the investment from large collocation providers and clients, but there's also a huge amount of investment from training, from consultancies, builders and other stakeholders in the industry. One of the advantages that we have is there's a lot of people that are seeing the growth of AI and the mission critical space, and it's a real attractive prospect for a lot of people. So we can we can lean on that from a consultancy perspective, upskilling our engineers in the DC space. We might have a large pool of engineers that are non DC and there's a huge opportunity to train them and upskill them. And and speaking with other people in the industry, project managers, architects, everyone sees that as a huge opportunity and there's a lot of investment. Time and training being spent on.
That. OK, that's this is really interesting. Part of the conversation, which is it's it's dispelling myths maybe, I don't know, but just helping. I think people to understand. And why data centres is such an important market in sector and what you know the value that it's bringing in terms of these these types of operations being closer to communities, if I can move us on into another aspect of what they potentially can deliver to, to communities and to Steve and I'm gonna, I'm gonna come to you here with your particular expertise. I want to I want to turn the attention a bit to the net zero agenda. There is a lot of talk, probably because it's quite easy to to to to say these things about the potential to use the waste heat and examples of data centres being able to heat the local swimming pool and you know, we potentially could see this at a much larger scale. You know can they can they power our homes for example in the future. Where is that going? We talked. We talked to the start of this episode about net zero communities. What's the journey? Look.
Like, well, I think from a heat export perspective, it's a popular topic. It's on the agenda in a, in a lot of discussions unfortunately in the UK, it hasn't been quite successful. And it has been in other areas on the continent. In the UK, we've had a lot of challenges associated with export. Many of the new sites as standard are including heat export provisions, so they'll include space on the site and the infrastructure to allow heat export off the site. With the AI increase in rack density, there's a there's even more of an opportunity to export heat from the site with with larger capacity required. For cooling and and and obviously that that could facilitate homes, leisure centres, amenities and there's a massive opportunity. There, the challenge historically is the clusters of data centres that we've currently got in the UK and and slow slow trading estate being one of them is a good example of that and there's there's many others. And the master planning and the foresight associated with the development of those areas hasn't really tied into the heat export piece. So there's there's a lot of work to be done there, the barriers include. The distance from the heat generation on the facility to the heat user, sometimes quite large distances, which require quite a lot of excavation, quite a lot of work and quite a lot of cost. The other thing is that it requires a a heat export third party to invest in that plan, that infrastructure and build it and. Wrote it and and the conversations haven't quite been there on that front.
So then if I if I may continue to pick at this with you, then if we if we take the cluster sites to one side and say well look there's a historic aspect you know that's how they've always been. But we look at some of the the the newer sites coming forward and where they're positioned. And people talking about them being closer to communities, presumably that opportunity starts to open up.
Hmm.
However, your point is then it's about a series of different stakeholders needing to engage.
Yeah, I think there's a there's another chance to take advantage of those opportunities, but there needs to be the right conversations happening at the right time. A lot of it is to do with timing. There is large cluster facilities now being built in new areas, but there needs to be the engagement with the users of that. The an example of that could be a large residential development, which could be a few blocks away, but it's ensuring that there's the right incentives in place. Discussions in place between those operators to ensure that they can take advantage. Uh. The London GLA have a heating hierarchy that forces these developments to look at district heat networks as an example that might be something that might be worth looking at from a heat export perspective to try and and put some pressure back on to the developers, but ultimately. The large hyperscale operators are not going to be swayed to select the site based on its ability to heat export, so we all need to work with them to make sure that the sites that tick all the remaining box. Because suitable for heat export to other users.
Do we sense that a number of these other stakeholders recognise the opportunity that is there and the importance of talking and and collaborating? James, I'm looking at you as well, yeah.
I I I think increasingly so, yes, the in in terms of planning, there's a much better understanding and acknowledgement of the wider benefits which would include all of these things that we've been. Discussing so and the fact that national policy is now promote. Shooting. Data centres in the way that it is as key drivers of growth and developments that should be encouraged. I think that all helps, whether whether it can get over those final hurdles that Stephen was describing is is another question, but it gets you further along that road.
Yeah, I I would have thought from a Community local council perspective, they would be more engaged third party heat exporter will be engaged if it's a viable solution for them. I think the challenge is bringing in the users of the. And making sure that they're engaged residential developments, commercial developments, community developments, we need to engage with those stakeholders.
OK, that's undoubtedly the next stage of that journey, isn't it? What other benefits can the partnership between data centres and local communities bring? What opportunities are we, or should we be exploring? And I'm I'm thinking about renewable power as well here.
Yeah, I think there's been a huge push towards renewable energy from a site selection perspective, from a lot of clients. There's a lot of clients are seeing a lot of value now and that historically there's been a a lot of clients have engaged and engaged in power purchaser agreements where energy providers where they will negotiate. The power purchase agreement based on you know the percentage of green energy that they're gonna receive on the. So I and this is a real positive step in the right direction from in terms of using renewable energy on these sites. But there's always challenges with how what percentages of the grid is green, what percentage of it is being facilitated with fossil fuels. So whilst that is a positive step, we're certainly seeing clients looking to a preference of. Being located in close proximity to renewable energy sources and DC, Blythe is a good example of this, where they're in close proximity to the offshore wind income. More and I think we'll start to see more and more of this moving forward as the hyperscale developers, core location providers, favour sites that are closer to renewable sources.
James, do you have any final thoughts as well in terms of? Where this sector is going?
Yeah, yes, I. And and Steven mentioned Blythe, the DC campus there and and I and I think I that's very recently been consented. 1010 billion investment, 540,000 square metres AI training, machine learning. The the effect that can have will have on regeneration is a really interesting area and and I think that that is 1 to watch the the move out of London and the southeast into some of these very large scale developments and the effect that potential effect whether that. Turns into reality and. Dan Byrne is from Blythe and he scored that first goal for Newcastle that ended 70 trophyless years. So I wonder whether Blythe itself can benefit in much the same way from this new development. So that's one I'll be watching.
That sounds to me like a perfect conclusion to the conversation with the pair of you. Indeed. So thank you to James, Donna and Stephen Melody for your contribution to this. We now turn to an interview with Emma Fryer. Hello, Emma. Thank you so much for joining us for this episode. We've been discussing the unique requirements of data centres when it comes to deciding where and how we build them and what are you thinking at Cyrus, one in terms of where you're looking at the expansion of this industry? And also it's integration with local communities.
So the two are very closely interrelated. There's two areas main areas of growth. Firstly, obviously, there's the AI explosion in AI that we're seeing, but actually in Europe, we're not expecting to be hosting huge AI workloads because they will be chasing cheap power, cheap renewable power and that's not available really at the moment in Europe. However, conventional cloud there's massive scope for continual growth and that is is somewhat hooked to existing locations, at least partially. So I think there's two different things. In one case, if we are, if we do end up with AI workloads, they will be in new locations, not the clusters we're familiar with. Conventional cloud will be in the cluster we're familiar with. Either way, those facilities are getting big. They're they're getting more noticeable. They're no longer in industrial estates, they're in semi rural or actually urban residential or maybe in the middle of communities that have never hosted them before. And therefore you can't go along landing something the size of the Starship enterprise somewhere, you know, in those kind of locations without and expect people not to notice. So that leads to us having a completely different conversation. With our host community.
OK. Thank you. And and and we've also discussed at some length the, the, the, the incredible value of this industry to the UK to local communities, local regions, etcetera, that's not necessarily always obvious to people and that probably builds on what you've just been talking about actually that's a big part of your role, isn't it? Why is there that perception gap and what can we do about? Set.
So why it's there? I think it's quite easy to understand. Firstly, we started as an industry that was all about disaster recovery. So secrecy was important. You weren't gonna say, hey, we're the disaster recovery site for. The Stock Exchange. That doesn't help you. That doesn't help you. Secondly, as mentioned before, we've tended to build in sort of obscure parts of industrial parks and trading. States. And also we've tended to build up to edge of sight and had big fences and toilets, a bit like an inverted prison. We don't have names on the outside. That's the sort of tradition of the industry. So you can't really expect people to understand what's going on inside and often they become quite speculative. You know, if you do this inverted prison and make yourself look very secret, if they'll see you're making death rays or something. And then also I think we perform an incredibly important function, but we've done it gradually. It's been privately funded. You've never had to see great government, you know, HS2 type initiatives, public funding raising initiatives. It's all been done privately. So that's happened very quietly. And I think the other thing which is obviously fingers crossed. Is that unlike some other utilities, like maybe water and power? Occasionally when under huge stress we haven't publicly failed hugely. And you know, big failure. Say you haven't. You can't supply 350,000 people with water for two weeks. You have a very interesting conversation with government about that. If that happens and everybody. Is. Aware of it, so the fact that we haven't failed, we've kept stuff going, you know, we kept stuff going through COVID we we keep stuff going. It's what we do and therefore people sort of don't notice and take. It. For granted, and I think there's also a sense we don't do anything useful. We do, but again, because it's sort of invisible. So I think those are the perception problems in terms of in terms of what we do. Saying it's much easier than doing because we have to raise awareness we have. To. Ensure people understand who we are, what we do, and then when we get to sight, we need to and I say I do it as three things. Ask, listen, act. We have to ask people. You know what they need from us. We have to engage with them. Listen to what they say and then we actually. Deliver. So there's a whole load of, you know, the whole load of things. We can do a huge list of facts so we can talk about that later, but there's there's many small things as well. You know, we can't necessarily add a new junction to the M40, but what we can do is make sure our hoardings are attractive, we can manage, you know, construction traffic flows. There's lots and lots of things we can do.
It's quite interesting actually, how this industry has changed over time, isn't it? As you've said from a? Sort of disaster recovery mode through to actually enabling the economy as such now and I wanted to delve just slightly deeper into that perception gap, if that's OK. I know that you've published some fascinating research which I think our listeners will be quite surprised by. I wonder if you could just give us some headlines on that in terms of people's perception. Of this industry.
Absolutely. We did. We interviewed 13,000 people across our seven European markets. And we split it by country by age, demographic and also by whether you live near a data centre or not. And the really interesting thing was that people were far less negative about data centres than the media would have us believe. So 93% of them were either neutral or positive about data centres and neutrality and positivity was about split, but only 7% were actually. That was encouraging, but on the other hand. And this comes. To our previous point, public awareness was really low. Barely 50% of people could identify the right definition of a data centre out of a choice of five. In the UK, that was the lowest in Europe at. 30. 8%, which is really worrying. And then there was a very low ability of people to be able to associate the digital services and apps they use every day, all the time. With data centres with in fact any physical infrastructure and the age demographic that was least likely to be able to associate, you know, the apps they use every day with physical infrastructure, with a 16 to 24 age group, which I thought was. You know, and I wonder if they never had. To dial up. I don't know and and we asked a group of students a couple of weeks ago why they thought that might be. And they said, well, you know, no one ever told us. It's not something appears on a bill. You don't. You don't get an Internet bill in the same way you get a water bill. Do you really you pay through your phone so you don't actually don't see it in that way.
Absolutely. You just expect it. It's just gotta be there.
Yeah.
Yeah. And I think the yes, it tells us some quite important things actually, yeah.
And the and and the heavy lifting as well. I know you got a bit of an analogy with the with with roads, if you like, haven't you as well?
Yes, I think it's true. I think there's a there's a lack of understanding of just how important data centres are in the they're not just to allow people to upload videos of themselves teaching their their dogs to tap dogs, they run the economy, as you say. And I think we have to think of data centres as infrastructure, not. As data storage, but has dated digital infrastructure in the same way that roads or railways are infrastructure and then we shouldn't perhaps expect a huge amount of direct employment that you see from a supermarket because you don't actually want infrastructure to employ lots of people all the time. You imagine the M1 covered in Rd works a whole time employing lots of people. I'm doing stuff. No. I mean, yes, they're eye watering the expensive to build. Just like any other infrastructure, but that you know, the main direct employment is in construction and then the value of that is in terms of productivity in terms of efficiency and also data centres have an absolutely colossal and very, very high value supply chain value chain, both directions. That's often overlooked because they're not on payroll. You know, very indirect.
Yes. And we've, we've covered that a little bit in this episode already in the in the time that we have with you, let's just also touch on from your perception as well how these operators can get involved in local community projects as well and the importance of that.
That's.
It's absolutely critical, I think. I think there's a number of things we can do as sites get bigger, you can make them more penetrable. You see these sites in, in industrial parks, you don't have any extra space. You have to come to edge of site. But if you buy a very big site, you could be creative about design. You can put your data centre. Now planners are quite happy for you to do a four Storey data centre if it allows amenity space around it. Now obviously there's a cost benefit. But you can do that. You can create green roots. You can create amenities. I can't begin to tell you how many does berms we've designed into our data centre landscaping to allow different sort of drainage levels and biodiversity. And so those things and they're they're not usually difficult to do, other things are. Engaging with local schools, doing outreach we have. We're designing into one data centre, a whole affordability workspace for local businesses. We're doing a training centre, lots and lots of public amenity. We're you know, all sort. We can regenerate areas because you can do that when you've got a big project. And I think the two way communication is really important. And a lot of it is very it's very simple. You know, one of the communities in bucks, they were very interested in when you know, a couple of buildings being. Polished. Can we have the bricks, their heritage bricks? Of course you can have the bricks. So I'm going on a brick. A brick. A brick. Brick safari. Would you call it a brick safari with the councillors around the site so they can tell us which bricks they want to retain. And those are very small things. But actually they really, really material in how you engage and ensure that people have agency. They're not. Just sort of. Frustrated bystanders. There's something rolls along. A big project rolls along. That's absolutely absurd. OK.
Umm. And and if I may just one final question. Uh, in the time that we have sustainability and net zero are obviously hugely important and and we spoke with Stephen and James earlier about waste heat, they explained the challenges some of the hopes for the future. It sounds like there's a lot that needs to fall into place for that. What's your perspective? What can we expect to see?
I think we can expect to see. The. More a more integrated approach. It has to happen and we're pushing from both sides and I think you know in terms of joining the dots between the heat producer and the heat off taker, there has to be a network in between and neither of those two are likely to be able to. Be in a position to. To put that in place, so we're happy to provide waste heat site. It's designed in as others have done. There are off takers, but that has to be the connection has to be right. They have to be nearby. So it's actually it looks like a complete no brainer in an urban environment, but even then it's not simple. I think OPDC it's all O common old O common they have I think got theirs going so that would be a fantastic.
Yes.
Template for others to work on because there's, you know, it's certainly an urban site. They've got a number of data centres contributing heat and they've got off takers. That's been a very heavy lift. I mean, I was there at the beginning of inclined to convene the operator, so I know. But I think it's it's about in other countries what you see is that the heat network is actually a municipal provision and then other people are obliged not to connect into it. Governments thinking really carefully about this, they're introducing these, this heat network zoning programme, and I I suspect that there will be. There'll be certainly there has to be some form of. Grant or Desnes involvement just to make to join those dots and make sure that works, because otherwise it would be such a waste.
Well, that sounds really encouraging, Emma. There sounds like there is a direction of travel there that hopefully we will get to that place where we're making the most of that and older common. Certainly as you say is a of very well known high profile site. So that would be a great case study in itself. Emma, thank you so much for joining us today. Very much appreciated your time. Thank you.
Thank you so much for being absolute. Pleasure.
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