Scotland's hyperscale data centre boom divides opinion over energy and environment

Scotland has a new boom industry, at least if planning applications are taken at face value.

The term "hyperscale data centre", rarely heard a few years ago, is now dividing opinion across the country as a rush of applications are made to build them.

A debate at Holyrood later, led by the Scottish Greens, will call for planning applications to be put on hold until promised new national guidelines are in force, with an emphasis on energy demand and the environment.

Ahead of the debate, ministers announced that all new applications for AI data centres will have to undergo an environmental impact assessment.

The growth of AI is happening at lightning pace, so what are the advantages and disadvantages of Scotland being at the forefront?

The single biggest reason why developers are interested in Scotland is because it allows them to say that their energy-hungry facility is being powered by green electricity.

Scotland has an abundance of wind and much of the energy from it is currently wasted because the transmission infrastructure isn't large enough to carry it from where it is generated to the consumers.

There are two ways of fixing that.

Installing more, bigger pylons to ship the electricity to England, where the bulk of the UK's population is, or bring the largest consumers of that electricity closer to the generators.

In fact, what's happening is both.

Research by BBC Scotland News has identified, as of 24 June, at least 23 projects which are in the planning process, though most experts believe many of those are speculative applications and will never be built.

Shortly before the debate in parliament, the government ordered that Environmental Impact Assessments will have to be submitted during planning applications for all new data centres with a power capacity exceeding 50 megawatts.

It said that proposed developments under that threshold would still have to be considered under established environmental regulations on a case-by-case basis.

The update follow an order last month requiring planning authorities to notify ministers of all new data centre applications within a week of validation.

But fears remain for people living in communities where potential sites have been identified because the faceless, warehouse-like buildings housing the servers can cover a massive footprint.

At Blackdog in Aberdeenshire, local resident Jamie Prentice spoke to me about the development planned for there which would stretch across several fields.

His house looks out to the Aberdeen Bay wind farm and the sea beyond.

But he says that if it's built there he'll effectively be living on an industrial estate.

Local people have begun to mobilise their opposition to it through social media, but Jamie clearly feels it will ruin the area.

He asks me whether I think the Blackdog project will ever happen and I have genuinely no idea.

It is likely the site has been chosen because of its proximity to the offshore wind farm which could give the developer some "green" kudos.

Scotland may have plenty of renewable power generation but experts have warned that does not necessarily mean data centres would run exclusively on renewable power.

During periods of low wind or when clouds are blocking the sun, it may mean having to fire up fossil fuel power stations to provide the energy required to keep the servers blinking.

Dr Callum MacIver warned MSPs this week that the additional demand could make climate change targets difficult to achieve because of the additional reliance on gas.

A mechanism that requires data centre developers to match their projects, with new green generation capacity being commissioned, would be a neat way of mitigating the risks but that requires government or regulatory intervention.

Political leaders across the globe have so far seemed reluctant to intervene, despite warnings.

There are concerns about the unintended consequences of building data centres which have been pushing up bills in Ireland and some parts of the US.

Last year, Irish data centres consumed 23% of the country's electricity and the demand for energy has pushed up the price for consumers.

The electricity system operator here says it is delinking the price of electricity from the high wholesale cost of gas, which should prevent a similar outcome.

But analysts are not yet convinced that is going to be fully effective.

The Scottish government has said it wants to "harness the economic opportunities" which come from data centres as an emerging sector.

The relative cheapness of land in Scotland makes it an attractive location for data centre developers.

Supporters claim they can bring with them thousands of jobs but most of those are in the construction phase.

Once operational, they can run with just a handful of people on site.

While they might be energy hungry, there are ways in which electricity system operators can manage that hunger so that supply and demand are matched.

Larger operators - the likes of Google and Chat GPT - will be building their data centres all over the world and say they are able to shift the work they do from the servers in Scotland to others in Silicon Valley, or beyond, when needed.

That means they don't have to operate flat out at all times and so grid operators will be afforded flexibility when they need it.

That doesn't mean balancing the demands of data centres will be easy but experts say it is no different to the additional electricity needed to charge electric vehicles or power domestic heat pumps.

Recent warnings about the potential dangers of AI show that there are significant unknowns with such a rapid growth of a new industry.

The AI revolution is happening and there are clearly pros and cons to Scotland being at the heart of it.