The UK's AI Energy Council: Powering the Future of Artificial Intelligence Through Strategic Energy Planning

The UK government's ambition to establish the country as a global leader in artificial intelligence took a significant step forward with the establishment of the AI Energy Council. This cross-sector initiative, jointly chaired by the Technology Secretary Peter Kyle and Energy Secretary Ed Miliband, represents a strategic approach to addressing one of the most pressing challenges facing AI development: ensuring adequate and sustainable energy supply to power the computational demands of artificial intelligence infrastructure.

The Council's Formation and Objectives

The AI Energy Council held its inaugural meeting on 8 April 2025, establishing five key areas of focus for the coming year. These priorities centre on ensuring the UK's energy system can support the country's AI and compute infrastructure, promoting sustainability through renewable energy solutions, and focusing on the safe and secure adoption of AI across the energy system whilst advising on how AI can support the transition to net zero.

With the government's ambitious target to increase the UK's public compute capacity twenty-fold over the next five years, the energy implications are substantial and require coordinated planning across sectors.  The Council's membership reflects this, including representatives from major technology companies such as Google, Microsoft, Amazon Web Services, ARM, and Equinix, alongside energy sector participants including the National Energy System Operator (NESO), Ofgem, National Grid, Scottish Power, EDF Energy, and the Nuclear Industry Association.

Energy Demand Forecasting and Grid Capacity

The second meeting, held on 30 June 2025, focused specifically on the energy demands required to power the UK's compute ambitions. The Government news update does not provide any substantive detail of the outcomes of the meeting but explains on a high level that a critical concern highlighted during discussions was that the energy demands of data centres - key drivers of AI development and growth - are expected to double in the coming years, emphasising the importance of ensuring data centres can be connected to the power grid as swiftly as possible.

Infrastructure and Grid Connection Reforms

The government has been working closely with Ofgem and NESO to deliver fundamental reforms to the UK's connections process. Once final approvals from Ofgem are in place, this could mean more than 400GW of additional capacity is freed up from the grid connection queue, which would significantly accelerate AI projects vital to economic growth.

The Council's work is directly linked to the government's £2 billion AI Opportunities Action Plan, which serves as a blueprint to accelerate AI adoption across various sectors, from healthcare diagnostics to educational planning tools. This includes the development of AI Growth Zones designed to unlock investment and create jobs whilst revitalising local communities.

Furthermore, Ofgem recently announced that an initial £8.9bn investment is being committed to Britain’s high-voltage electricity network, with a further £1.3bn available – to power the biggest expansion of the electricity grid since the 1960s.

Sustainability and Clean Energy Integration

Both Secretaries have emphasised the importance of maintaining the UK's clean energy superpower ambitions whilst supporting AI development. The Energy Secretary highlighted how AI can play an important role in building a new era of clean electricity whilst meeting the power demands of new technology – see our article here on this topic.

Impact and Considerations for Bird & Bird's Clients

Technology Sector Clients

For clients involved in AI development, data centre operations, or cloud computing services, the AI Energy Council's work presents both opportunities and challenges:

Grid Connection Priorities: The government's commitment to reforming the connections process and freeing up 400GW of additional grid capacity represents a significant opportunity for data centre developers and operators. Clients should prepare for accelerated connection processes and consider how to position themselves advantageously in the reformed system.

Compute Capacity Expansion: The twenty-fold increase in public compute capacity over five years signals substantial government investment in AI infrastructure. Technology companies should consider how to align their expansion plans with government priorities and potentially access public compute resources or partnerships.

Regulatory Compliance: With the Council's emphasis on "safe and secure adoption of AI across the energy system," technology clients should anticipate enhanced regulatory frameworks governing AI deployment in critical infrastructure. Early engagement with emerging standards will be crucial.

Energy Sector Clients

Energy sector clients face transformative changes as the grid adapts to AI demands:

Demand Forecasting: Energy companies will need to develop sophisticated forecasting capabilities to predict AI-driven energy demand. The Council's working group on forecasting energy demand suggests this will become a critical competency, potentially requiring investment in new analytical capabilities and data systems.

Infrastructure Investment: The doubling of data centre energy demands creates both challenges and opportunities for energy providers. Companies should assess their capacity to serve high-demand, reliability-critical customers whilst maintaining grid stability.

Renewable Energy Integration: The government's emphasis on sustainable AI development creates opportunities for renewable energy providers. However, the challenge of providing constant, uninterrupted power supply to data centres may favour more stable energy sources, including nuclear power, as suggested by Amazon Web Services' recent statements.

Cross-Sector Considerations

Planning and Development: The absence of planning sector representatives in the current Council composition may have implications for project delivery timelines. Clients involved in data centre development should engage proactively with local planning authorities to secure all necessary consents and permissions are obtained. Demonstrating local community support will be key to avoid public protesting, which may be detrimental or determinative of a project’s success.

Skills and Training: The rapid expansion of AI infrastructure will require significant skills development across both technology and energy sectors. Companies should consider investing in employee training, particularly in AI system integration and the management of data.

Ethical AI Implementation: The Council's emphasis on "responsible" AI adoption suggests that ethical considerations will be integral to regulatory frameworks. Companies should ensure robust ethical safeguards are in place, maintaining human checks to prevent potential market exploitation or compliance issues.

Water Resource Management: Beyond electricity consumption, AI data centres require significant water resources for cooling. Companies operating in water-scarce areas should develop comprehensive resource management strategies and consider water-saving technologies.

The AI Energy Council represents a pivotal moment in the UK's AI development strategy, with implications extending far beyond the immediate participants. Business success will depend on understanding and adapting to the evolving landscape where artificial intelligence and energy infrastructure converge to power the UK's technological future.