UK AI startup Nscale faces backlash over data centre energy demands
TL;DR: Nscale, one of the UK’s largest AI startups, is facing local opposition to its planned data centre in Loughton, Essex. Council officers have raised concerns that the site’s energy requirements — now 50% larger than originally proposed — could strain the local electricity grid and push up bills for residents. The project has been delayed until early 2027.
Plans to build what has been described as “the UK’s largest AI supercomputer” have run into local resistance. Nscale, a UK-headquartered AI infrastructure company backed by Nvidia, Dell, and Norwegian investor Aker, had proposed a data centre on a former scaffolding warehouse site in Loughton. Microsoft is set to be a key customer after the two companies signed a partnership to develop AI computing capacity.
What sparked the objections
Loughton Town Council officers have demanded fresh evidence from Nscale to prove the development’s energy consumption will not burden local residents. The objection, sent to Epping Forest District Council, notes the site is now 50% larger and has 50% more internal capacity than originally proposed, requiring additional cooling infrastructure and significantly more power.
The planning officer has requested a full new planning application, and the project timeline has slipped from 2026 to early 2027. Nscale attributes part of the delay to securing access to Nvidia’s latest Vera Rubin 200 processors, announced this month.
The wider energy tension
The Loughton case exemplifies a growing friction in the UK’s AI ambitions. The government has championed AI data centre development as central to economic growth, with ministers actively courting developers and seeking to ease planning constraints. Last week, Housing Secretary Steve Reed overruled local objections in Buckinghamshire to give ministers the final say on a separate £2 billion data project.
Yet the energy arithmetic is sobering. A recent Ofgem report found the total pipeline of UK data centre projects carries power demands exceeding 50 gigawatts — more than Britain’s peak daily electricity consumption if all were built and operated at full capacity. That figure sits uneasily alongside Labour’s net zero commitments.
Looking forward
Nscale, which recently raised £1.6 billion ($2 billion) for US expansion and counts Sir Nick Clegg among its board members, said construction work on the Loughton site is expected to begin in Q2 2026 with operations starting in Q2 2027. The company’s experience may foreshadow similar battles across the country as the gap between national AI infrastructure targets and local energy realities becomes harder to bridge.