City Hall will have a specific policy dedicated to the building of new data centres in the upcoming London Plan, officials have confirmed, following concerns about their immense power and water usage.
Between 50 and 60 of around 100 units — which house IT infrastructure such as servers — currently in the planning pipeline are scheduled to be built in London. It is estimated that every 10 new power-hungry data centres built could result in 2.7mn tonnes of carbon emissions, with further concerns about their substantial water usage. That could mean over 16mn tonnes of Co2 added by the ones already planned.
Megan Life, assistant director, environment and energy at the Greater London Authority (GLA), has confirmed that City Hall is developing a policy which will attempt to balance any economic benefits with environmental damage.
She told the London Assembly Environment Committee: “We’re thinking about how we use the policy tool to keep hold of the kind of economic growth benefits that data centres offer whilst trying to mitigate some of what we recognise are some quite challenging things associated with how resource intensive they are.”
Deputy mayor for the environment Mete Coban added that data centres brought both “big benefits” and “massive challenges” for the capital, “particularly on energy and water consumption levels”.
Citing Melbourne and Phoenix as two major cities that London could learn lessons from, he said: “It’s not just a London problem, it’s going to be a global problem.
“And it’s about making sure that our environment doesn’t suffer in the hands of a few global corporations who will take and not give back. And so we want to make sure we do this in an equitable way.”
No details have yet been given about what could be included in any such dedicated policy in London, though Australian lawmakers are currently drawing up their own proposals as the nation now operates up to 260 data centres, mostly in Sydney and Melbourne.
Energy minister Chris Bowen suggested that data centre developers must also build renewable “new energy to go with it”, while Australian Conservation Foundation chief executive Adam Bandt claimed: “If you want to build a data centre, you should have to build the renewables and water recycling to power it.”
Melbourne’s mayor Nick Reece, who Coban said he had met over the issue, has called on the federal government to establish mandatory sustainability standards and “transparent monitoring requirements” in a bid to rein in their power usage.
Last month the committee heard that data centre construction was “undermining” the Mayor’s climate goals.
The Mayor of London confirmed last year that he “commissioned a study which will forecast data centre growth in London to inform future policy, which will also need to take into account the identification of suitable locations for data centres”.
Sir Sadiq Khan said in the summer that he “recognises the importance of data centres in supporting the London economy but also the additional pressure they put on industrial land supply and on electricity and water supply”.
In December the London Assembly Planning and Regeneration Committee demanded a standalone policy for data centres in the next London Plan, suggesting several housing projects in West London have been stalled because of data centres using all available electrical grid capacity.
London Assembly Environment Committee – Tuesday 3 March 2026, Agenda. Webcast.
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