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Demand for data centres in Europe will more than triple between now and 2030, from 10 gigawatts to 35 gigawatts, according to McKinsey [1]. Meeting that demand will require between $250 and $300 billion (£200 and £240bn) of investment.
With power in short supply in established markets, and ambitious decarbonisation targets set by the sector, data centre operators are looking for new locations with access to renewable energy – alongside access to land and major fibre networks. The potential benefits for these new locations will be far reaching, delivering jobs in construction and operation with knock-on benefits for local economies and supply chains.
Scotland is ideally placed to gain a significant piece of this pie and is rapidly emerging as the next European data centre hub. Its favourable climate and renewable energy infrastructure combined with a welcoming economic environment and skilled workforce make it a compelling choice for data centre development.
> It already generates significant amounts of renewable energy, with plans to develop more, through offshore and onshore wind farms.
> There are parcels of land in proximity to these renewable sources.
> Its favourable climate will reduce power demands for cooling.
> It has connections to multiple subsea data cables.
> There are specialist contractors in Scotland and the UK with data centre experience.
> Scotland has an established oil and gas industry with skills that could transfer to both the construction and operation phases of data centres.
> The Scottish Government is committed to the development of data centres and its digital economy, publishing its vision back in 2021.
Mechanisms for speeding up changes to land zoning, planning and permitting would make this an even more attractive proposition to data centre developers.
With an estimated 3GW of development already under consideration, the economic opportunity for Scotland is significant. But in a country relatively new to the industry, there is work to be done to prepare the supply chain for the scale of development ahead.
In this report, we explore the opportunity for the Scottish supply chain and what needs to happen for Scotland to become the next European data centre hub.
Data centres that rent out rack space to third parties for their servers and network equipment are known as colocation data centres, or colos. Hyperscale data centres, as the name suggests, are huge data centres (10,000 sq ft or more), although the size of data centres is usually expressed in terms of their power consumption.
Data centres that rent out rack space to third parties for their servers and network equipment are known as colocation data centres, or colos.
Hyperscale data centres, as the name suggests, are huge data centres (10,000 sq ft or more), although the size of data centres is usually expressed in terms of their power consumption. They may be developed by an individual company – think big names like Google, Microsoft or Amazon Web Services – or by another company who would rent out large areas of space and power requirement for a relatively long period of time.
Global demand for data centres was already growing at a significant rate before ChatGPT and other generative AI tools took off. In addition to demand for cloud storage, companies are deploying more apps and looking to automation and robotics, all of which require data centre space. The race is now on to create more space for data storage and processing – without quite knowing exactly what the future impact of AI will be.
A major impact of the growth in AI is that data centres are getting bigger. Five years ago, 60MW was considered a large data centre campus; now we are looking at ten times that.
Servers in AI data centres are deployed in higher density racks, which create more heat and therefore require more efficient cooling. Some AI data centres will be created purely for training machine learning algorithms, and these can be located away from urban areas. Cooler climates like the Nordics or Scotland look attractive because the cost of power needed for cooling will be lower compared to other climate types and countries in the region. AI data centres where the algorithms are deployed are likely to be nearer to urban populations.
Foundation/ groundworks
Concrete floors
Frame – steel or (precast) concrete
Roof
Cladding
Internal fit out
Block storage devices or file storage devices
Computer Room Air Conditioning (CRAC): Uses refrigerants to cool the air.
Computer Room Air Handler (CRAH): Uses chilled water to cool the air.
Mechanical, electrical and plumbing (MEP)
Physical security and access systems
Building Management System
Fire suppression
Cables
Switches
Routers
Firewalls
Chilled Water Systems: Circulate chilled water to absorb heat.
Direct-to-Chip Cooling: Delivers coolant directly to the hottest parts of the server.
Immersion Cooling: Submerges servers in a thermally conductive liquid.
Servers – rack servers or blade servers
Racks to hold servers
Transformers – to step down power from the grid
Busbar – carries electricity to server racks
Power Distribution Units (PDUs) – serve individual racks of equipment
Remote Power Panels – connect PDUs and individual IT devices
Uninterruptible power supplies (UPS) – to cover power utility issues, providing battery backup
Standby generators – to supply longer lasting power backup than UPS
There are several factors putting pressure on the traditional FLAP-D markets – and creating the opportunity for new players to take the stage.
Ask anyone what the biggest constraint in data centre development is and they will invariably talk about availability of power. The challenge is how to find land that is close to both a plentiful resilient power supply and a main fibre network.
The hunt for power is one of the factors driving developers to look outside the traditional data centre markets, which in Europe are Frankfurt, London, Amsterdam, Paris and Dublin – known as FLAP-D.
Land with access to green power is even more attractive. All the major players have signed up to the Climate Neutral Data Centre Pact [2] which aims to make data centres in Europe climate neutral by 2030. Obtaining renewable energy is clearly a big part of that.
Perhaps the second most pressing issue for developers is how to find the companies and individuals who can deliver their data centres. Because this is a rapidly growing market, there is high demand on the general contractors with data centre experience.
In almost all markets globally, the number of mechanical, electrical and plumbing (MEP) contractors who have the necessary experience and competency to tackle these types of projects is insufficient to meet demand.
In newer markets, developers tend to run up against issues related to planning and permitting. Markets that have successfully attracted data centre developers have found ways to streamline these processes, and some have added incentives such as tax breaks too.
With an estimated 3GW of development already under consideration, across 20 sites, it’s clear that all eyes are on Scotland. With its favourable climate and renewable energy infrastructure combined with a welcoming economic environment and skilled workforce, it’s a compelling choice for data centre development.
Scotland’s renewable energy production has been growing steadily for the past 15 years, driven initially by increases in onshore wind and more latterly by increases in offshore wind generation. It now generates more electricity than it consumes, according to the Scottish Government [3].
In 2023, over 33,000 GWh of renewable electricity was generated in Scotland. As of the end of March 2024, there was an operational capacity of 15.5 GW for renewable energy generation and there is a substantial pipeline of 790 renewable energy projects in the pipeline with a total estimated capacity of 46.8GW [4].
Of its planned projects, 22GW are under construction or awaiting construction with 25 GW in planning. In terms of technologies, 20.2 GW will be batteries and pumped hydro storage, 14.4GW will be onshore wind and 9.7 GW offshore wind.
Scottish & Southern Electricity Networks (SSEN) is investing over £20bn to upgrade the electricity transmission network across the North of Scotland between now and 2030. As well as offshore wind connection the infrastructure will include overhead lines, substations and subsea links. [5]
Scotland is connected to three subsea fibre cables and has proximity to several more. The Tampnet Offshore FOC Network is critical to Scotland’s data centre industry with a landing point in Aberdeen and connections to Norway and South-East England. Likewise, the FARICE-1 connects Dunnet Bay in the North of Scotland to the Faroe Islands and Iceland and the SHEFA-2 runs from Scotland to the Faroe Islands.
Subsea cables that run close to Scotland’s coast are:
In its 2021 action plan for green data centres and digital connectivity [6], the Scottish Government set out its intent to establish connections to international subsea cables in the West, North and East of Scotland. This could involve partnerships between the public and private sectors, with potential sources of funding such as infrastructure funds, City and Regional Growth Deals or Scottish National Investment Bank opportunities.
In 2019, the Scottish Government awarded three contracts worth over £600m to Outreach to deliver superfast broadband to Scotland’s hardest-to-connect locations [7], the Reaching 100% (R100) programme, which is currently underway. This does mean that some of the possible data centre sites are only served by that one fibre provider.
Of 20 potential data centre sites identified in a report commissioned by Scottish Futures Trust/Host in Scotland, Crown Estate Scotland and Scottish Enterprise and published in June 2023 [8], five sites were identified as having high connectivity (multiple fibre providers and tier 1 providers) and the remainder had moderate connectivity (just one fibre provider).
Microgrids – localised groups of electricity sources and loads that can operate independently from the main grid – present another opportunity for Scotland. They enhance energy security by providing a reliable power supply, even during main grid outages – ideal for critical infrastructure developments in remote areas.
Microgrids efficiently integrate renewable energy resources, which Scotland has in abundance. By developing environmentally friendly microgrids, often referred to as “green corridors,” Scotland can advance sustainable energy solutions while supporting economic and infrastructural growth.
Source: submarinecablemap.com
Scotland is the most sparsely populated country in the UK, with a population density of 68 people per square km. This compares to 5,640 for London and 408 for England [9].
The 20 shortlisted sites referenced above are all close to existing or future renewable power sources. Of these, 13 are identified as potential hyperscale developments, the remainder as suitable for urban colocation facilities.
As awareness about the potential for data centre development in Scotland increases, more landowners with suitable parcels of land are likely to come forward.
"With its favourable climate and renewable energy infrastructure combined with a welcoming economic environment and skilled workforce, it’s a compelling choice for data centre development."
Scotland is the coolest part of the UK. For instance, temperatures in Aberdeen generally vary between 2 and 18 degrees, compared to London whose temperature varies between 4 and 23 degrees and have exceeded 40 degrees in recent years. Temperatures drop further in the North of Scotland.
Since much of the energy expenditure on an operational data centre goes on providing cooling for data processing equipment, lower temperatures lead to cost savings for data centres in operation.
As data centre markets across Europe struggle with skills shortages, Scotland could provide the answer. The country is home to 19 universities with the Universities of Edinburgh, Glasgow and St Andrews all within the top 100 in the world [10].
Other leading Scottish universities include Aberdeen, Heriot-Watt, Strathclyde, Stirling, Dundee, Edinburgh Napier University and Queen Margaret University, Edinburgh. All potential talent pools for a burgeoning Scottish data centre industry.
Looking to adjacent industries, Scotland has traditionally had a very strong oil and gas sector, centred around Aberdeen. As the world and the UK transitions away from fossil fuels, some companies and individuals are already moving into different sectors, such as wind farms and other renewable energies – and data centres.
The economic opportunity for Scotland is significant. But in a country relatively new to the industry, there is work to be done to prepare the supply chain for the scale of development ahead.
The cost of constructing a 50MW data centre facility in central Scotland is estimated to be circa £430m (£8.60/MW).
Figures are based on a site location close to the central belt with no abnormal ground conditions, significant transport infrastructure or power upgrades and good access to the fibre network. Costs have been provided for a standard air-cooled design. Costings for liquid-cooled facilities and other advanced design features are available on request.
Nothing of this size has been built in the sector to date in Scotland. Therefore, we have used benchmark figures from the UK data centre market along with regionalisation benchmarks for similar large-scale manufacturing / pharmaceutical and mission critical price indexing.
The following table provides an outline elemental breakdown:
Based upon a potential data centre sector of 3GW (3,000 MW) in Scotland this would take the total capital expenditure to £25.8Bn split as follows:
Delivering to this size and scale over a short-time frame would put extreme demand on the Scottish construction supply chain.
Some elements of a data centre build, such as groundworks and foundations, and the structure of the building itself, are very similar to other types of building construction. Other elements require more specialist data centre experience.
Unlike a standard warehouse, a high percentage of the development cost – around 32% – is due to electrical and mechanical fit-out with a further 30% spent on the computing and power infrastructure required – for a majority of developers nowadays these fall under the OFCI (owner furnished contractor installed) equipment category.
For those managing data centre projects, both project management firms and general contractors, high levels of competency in planning and in logistics are vital. Programme is king for a data centre development. Strict adherence to timelines is critical. Delays are costly, especially since space is often pre-allocated before construction begins. Lead times for the OFCI elements vary, can be very long and are also subject to supply chain disruptions.
"The economic opportunity for Scotland is significant. But in a country relatively new to the industry, there is work to be done to prepare the supply chain for the scale of development ahead."
Looking at the subcontractors and suppliers who make up the MEP element of a data centre, there are a good number of Scottish companies who could take on this role, as well as some UK-based ones. For the more specialist MEP packages, there are fewer potential suppliers.
General contractors, and to some extent MEP contractors, with experience in other mission critical sectors have successfully transitioned onto data centre projects. Mission critical facilities are those that require 24-7 operation without which an organisation could not function. As well as data centres, these include power plants, hospitals and airports.
Since data centre projects tend to be relatively high value – the total build cost of a 50MW data centre in Scotland could reach around £430m according to Soben’s calculations – general contractors must be of a sufficient size to take them on.
There are several UK contractors – some of which have operations in Scotland – that are well placed to take on these projects. Additionally, it could be possible for some of the larger Scottish contractors to consider entering the sector.
Some companies and individuals could be attracted to data centre construction – and operation – from Scotland’s established oil and gas sector.
Skills which can be in short supply in the data centre construction market – such as project management, construction management, logistics and supply chain management, commissioning, quality assurance – already exist in some Scottish companies serving oil and gas projects and companies.
It is worth noting that some data centre developers are deploying an alternative to the general contractor model, particularly in Europe. Project Management Consultancy (PMC) contracts see a specialist consultant take on the management of the subcontractors in the supply chain, acting as a construction manager also actively managing financial risk for the developer. This can allow packages of work to be split up so that smaller contractors, which cannot shoulder the risk of large packages, can work on data centre projects.
This could prove a good option for Scottish projects, where consultancies with knowledge of delivering data centres through the PMC route, and of Scottish construction culture, could help to create opportunities for SMEs.
The opportunity for the sector is clear, but the opportunity for Scotland is just as compelling, with substantial economic and societal benefits.
Creating a data centre sector in Scotland would deliver economic benefits by generating GDP and tax revenue due to workers employed directly in construction and operation, those employed indirectly in various supply chains and through induced impacts due to people directly and indirectly employed spending their money in Scotland.
Ball-park estimations suggest that a 50MW data centre, with standard cooling technology, would cost £430m to construct. Scaling that up to a total sector of 3GW, which could be delivered over 20 years, that gives a spend of £5.68bn. Estimated land costs – assuming around 20 hectares per 50MW development and a land cost of £10m per acre or £25m per hectare – would be £3bn.
Detailed financial modelling is required to determine what the gross value added (GVA) contribution to Scotland’s GDP would be, but it might be reasonable to say that could amount to half the land and construction costs, based on other studies [11]. That could be £4.34bn over 20 years, or £217m per year.
In operation, data centres employ a relatively small number of people. Say, 50 per building or 250 for a data centre campus. However, they create additional, associated employment due to activities such as facilities management and the provision of other goods and services.
A 2023 report by Amazon Web Services (AWS) on its impact in Ireland over the previous 17 years suggests that for every directly employed worker during construction and operation, 1.4 people are employed by the supply chain or in other roles [12].
The establishment of a data centre sector in Scotland could help to accelerate planned investment in renewable energy and electricity transmission networks. This, in turn, could help to establish low carbon or net zero hubs, hosting manufacturers, green hydrogen production and carbon capture and storage facilities.
The location of data centre campuses in Scotland will also help to boost its burgeoning digital economy, through reputation and improved connectivity. Scotland’s gaming sector has grown to contribute a GVA of £188.5m to Scotland’s economy, on a par with its fintech, data, cybersecurity and space industries [13]. Investment in data centres will attract investment in digital industries and mark out Scotland as a good place for digital entrepreneurs and start-ups.
"The establishment of a data centre sector in Scotland could help to accelerate planned investment in renewable energy and electricity transmission networks."
There’s no doubt that the opportunity is there for Scottish data centres and the economic and societal benefits are compelling. So how can Scotland prepare itself, creating an even more attractive proposition for data centre developers?
Currently, some of the sites shortlisted for potential data centre developments in the report commissioned by Scottish Futures Trust/Host in Scotland, Crown Estate Scotland and Scottish Enterprise have already been earmarked for other uses. And real estate agents report that demand for industrial land in prime locations is high which is inflating land prices. Creating more awareness among landowners and real estate professionals about the requirements of data centre developers would create more opportunities.
As mentioned above, the Scottish Government’s R100 programme to deliver terrestrial connectivity to rural areas is already underway. This programme could be extended to better serve identified data centre sites. Additionally, the investment in connections to subsea cables mooted in the Government’s green data centres and digital connectivity plans could be accelerated to make sites close to renewable energy even more attractive.
Activities such as land re-zoning, stakeholder consultations, environmental and construction approvals can currently take some time in Scotland. Local authorities who are keen to attract data centres to their area could consider streamlining these processes, for instance by establishing dedicated teams to drive the approvals. An important task is to provide sufficient information to local communities so that they understand the impacts and benefits of any proposed data centre development.
As mentioned above, Scotland is home to the oil and gas industry, employing people with transferrable skills at all levels, some of whom could transition to the data centre sector. The critical requirements for data centre delivery are companies with the right competency in project management, construction management, MEP installation and commissioning who are used to working on programme-critical projects.
There are several universities in Scotland offering undergraduate construction management courses and Masters courses in construction project management. General contractors or specialist consultants could reinforce links with these institutions and work to identify and attract potential graduates who could be fast tracked for the data centre sector.
Considering MEP skills, Aberdeen’s position as the ‘Energy Capital of Europe’ means that there are already multiple organisations providing mechanical and electrical training at all levels. These organisations would be ideally placed to provide data centre specific training to convert existing personnel or to develop people new to the industry.
For the operation phase of data centres, it would make sense to establish data centre technician training at established academic institutions, as had happened in Ireland (at the Tallaght Campus of Technological University Dublin (TU Dublin), TU Dublin Blanchardstown, and the Drogheda Institute of Further Education). There are 20 universities and colleges in Scotland that offer degrees in computing and IT. Work could be done to identify suitable institutions that would be willing to partner with data centre operators to offer data centre technician programme.
Scotland can learn a lot from other regions with similar emerging data centre industries – like the region of Aragon in Northeastern Spain, which is also gearing up to be a data centre hotspot.
The region has seen several announcements of significant investments over the past six months, including:
Amazon Web Services, which already has three data centres in the region, announced a €15.7bn (£13bn) investment over a decade to build more centres there in May 2024.
In July 2024, Microsoft announced it is investing €6.6bn (£5.5bn) in its data centre campus just outside the region’s capital Zaragoza.
In October Blackstone said it would invest €7.5bn (£6.25bn) in the Rodes Project in Calatorao in the province of Zaragoza.
In November Box2Bit announced an investment of €3.4 bn (£2.84bn) in the Cariñena area.
One of the things that is taken into account when choosing the location of these projects is the commitment of local governments, and we have found that the one in Aragon was aligned with us, which has been very important in making the decision.
Aragon has many similarities with Scotland, with factors that make it attractive to data centre developers and operators including:
Aragon already produces renewable energy through solar and wind and hydropower and is increasing its production every year [14]. BP announced in 2023 that it was expanding solar projects throughout the region and construction of BayWa’s wind and solar energy cluster outside Zaragoza began in 2024.
Aragon sits at almost equal distances between Bilbao and Barcelona where subsea data cables land connections, and Madrid to the southwest, which has multiple connections.
AWS explained to Xataka [15] that it required three data centres to service an ‘availability zone’ (geographic area) which must be close enough together for very fast connection (less than 100 miles) but far enough apart so that if one fails, the other still function.
The Government of Aragon has said that it is working to easing permits – which can take up to 24 months for data centres in Spain generally – and removing administrative hurdles with a goal of halving waiting times.
Soben is the only Scottish construction consultancy that specialises in data centres.
We offer something different: world-class consultancy, combined with practical commercial experience. Our team of experts are currently working with the global leaders in hyperscale and colocation data centre development on some of the world’s largest, most complex schemes, across six continents.
From our Glasgow HQ, our specialist team is advising on the huge opportunity for data centre development across Scotland.
Founder & Group CEO
Director
Operations Director – Consultancy EMEA
1 – McKinsey & Company. “The Role of Power in Unlocking the European AI Revolution.” Available Online.
2 – Climate Neutral Data Centre Pact. “Home Page.” Available Online.
3 – Scottish Government. “Record Renewable Energy Output.” Available Online.
4 – Scottish Government. “Energy Statistics for Scotland: Q1 2024.” Available Online.
5 – SSEN Transmission. “2030 Projects.” Available Online.
6 – Scottish Government. “Green Datacentres and Digital Connectivity: Vision and Action Plan for Scotland.” Available Online.
7 – ISPreview. “BT Scoop Lot 1 of Scotland’s R100 Superfast Broadband Rollout.” Available Online.
8 – Scottish Government. “Green Datacentres and Digital Connectivity: Vision and Action Plan for Scotland.” Available Online.
9 – Office for National Statistics. “Annual Mid-Year Population Estimates: Mid-2022.” Available Online.
10 – Top Universities. “Top Universities in Scotland.” Available Online.
11 – Havering Council. “Oxford Economics – Reef Group Data Centre.” Available Online.
12 – Amazon. “AWS Indecon Report: October 2023.” Available Online.
13 – Scottish Games Network. “Government Backs Scotland’s National Games Strategy.” Available Online.
14 – Red Eléctrica de España. “Press Release: Aragon Data Centres.” Available Online.
15 – Xataka. “Why Amazon Chose Aragon for its First Three Data Centres in Spain.” Available Online.
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