I’ve been thinking: northern UK regions often generate more wind power than local demand can absorb (so turbines are sometimes curtailed). Why aren’t we locating flexible load‑facilities (e.g., GPU‑based data centres) there, to soak up that “extra” energy?

Here are the specific policy/market questions I’m stuck on:

  1. The Review of Electricity Market Arrangements (REMA) concluded that the UK will not move to zonal pricing (i.e different wholesale electricity prices by region). Instead, the government opts for a single national wholesale price

  2. Zonal pricing would have created locational signals: zones with abundant generation and low demand could have lower prices, incentivising large electricity users (e.g data centres) to locate in those zones.

  3. What infrastructure or network incentives or planning regimes would be needed (or are missing) to make north‑UK data centres viable for absorbing “excess” wind?

  4. On the other hand, in other sectors we’ve seen relocation/regional‑spread policies: BBC’s move to MediaCityUK in Salford, Channel 4’s relocation focus outside London. If the government/regulators can push media companies out of London, why isn’t the same kind of push (or incentive) applied in the energy/large‑load sector to make the north have more large demand‑facilities absorbing renewables?

Would love insights from folks in energy policy, grid operators, or the data‑centre industry: what are the bottlenecks and the enablers for this kind of flexible demand siting in the north?

a. See https://blog.google/around-the-globe/google-europe/united-kingdom/waltham-cross-data-centre/
b. See https://www.telegraph.co.uk/business/2025/06/05/starmer-intervenes-higher-energy-bills-south/

How does UK policy (esp. the decision to ditch zonal pricing) influence where large data centres get built?
byu/david-yammer-murdoch inenergy



by david-yammer-murdoch

3 comments

  2. GPU based data centers are currently not flexible load. An hour of unused GPU gives a profit drop because currently the yields are higher than the peak electricity price.

  3. The bottleneck is that flexible load just doesn’t want to connect to where there’s spare capacity on the network, and the grid’s financial incentives aren’t big enough to do so.

    Yes, there are times in Scotland where it would be very useful to have highly-responsive load. But it’s not a huge number of hours per year, and it has to be very close to the existing network (it can’t just go in the middle of nowhere).

    And it probably has to have low capital cost, because an investor can’t know whether someone else is going to come along next year with another option to mop up the cheap electricity whenever it’s available, which could reduce the available rewards for doing so.

    The rejection of zonal pricing was a failure of courage when it was needed. The problem for the Secretary of State is that he has a **lot** of battles to fight, and some of them are very big. This was seen as one of the less critical ones, and so he backed down, preferring to fight the bigger battles, one of which was keeping his job through the last reshuffle.

    And as he – along with Wes Streeting – is one of the highest-performing Cabinet ministers right now, perhaps it was the right choice **from that perspective**, even though it was the wrong choice from the perspective of energy policy.

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