Driving the data boom: Automated vehicles and the data centre challenge

Introduction

AVs are currently in advanced stages of development and are expected to appear on UK roads from 2027. AVs will produce tremendous volumes of data.

Where is that data going to be stored?

The answer is data centres.

“The upcoming roll-out of AVs will generate vast amounts of data, and all of it has to be stored somewhere.”

Could the roll-out of AVs be affected if enough data centres are not built?

Whilst there are legitimate concerns about the construction and maintenance of data centres, some of which may slow or perhaps even prevent them being built in certain locations, it seems likely (given their importance) that enough data centres will be built generally to cater to future needs, including those of AVs. AVs will, for instance, have a degree of on-vehicle data storage and the current UK Government guidance proposes that data produced by AVs be retained for up to 39 months before it can be destroyed.

“Data centres are always ‘on’, requiring a constant power supply 24/7.”

Conclusion

The upcoming roll-out of AVs will generate vast amounts of data and this is all going to have to be stored somewhere. Data centres will therefore be required to cater to this need. Whilst data centres have CNI status, that does not make them immune to public, environmental and social concerns. There can be some lesser-known upsides to data centres such as community heating projects, but it is likely that data centres will continue to prove to be controversial. Insurers need to be mindful of the risks of covering them although there are many things they can do to mitigate against those risks.

Are data centres controversial?

These large data centres often prove to be controversial in terms of where they are and how much energy
and water is needed to keep them operative once built, against the backdrop of making energy production
more sustainable – the shift to renewables, particularly in the UK – and climate change which has (certainly
in 2026) led to drought conditions across much of England and Wales. 

To mitigate against concerns typically raised about energy and water use, developers of data centres are often keen to explore powering them from renewable energy sources such as wind and solar, combined with battery energy storage systems (BESS). In Scotland, for instance, there is a surplus of renewable energy which makes it an attractive location for new hyperscale data centres – although the majority of data centres in the UK are actually still concentrated in London and the south east.

Data centres are always 'on' and need a constant power supply 24/7. This is not compatible with most large-scale renewable energy supplies which depend on daylight and the wind blowing. This is helping to drive the expansion of BESS. For instance, the Coalburn 1 site in South Lanarkshire in Scotland recently claimed the crown for the largest operational BESS in Europe (the first of three one GWh sites in Scotland).

 Cooling systems that do not rely on water at all, such as air cooling, or by recycling the water in closed-loop systems, are being developed. An interesting (and beneficial from a local perspective) development is using the water heated from a data centre for community heating projects – the Old Oak and Park Royal scheme in London being a good example, which is anticipated once completed to heat up to 25,000 homes. The principle is the same as for large scale geothermal projects such as those in Iceland, which heats 90% of its homes given its location atop the mid-Atlantic ridge thanks to the volcanic heat produced.

A recent development which highlights concerns over data centres is that the Scottish Government is potentially contemplating a freeze on all new hyperscale data centres being built in Scotland, fuelled by public objections, after the SNP's national council passed a motion to do so in July 2026. If this is approved by Holyrood, it could significantly impact the development of the 24 centres currently planned in Scotland.

“The AV revolution is also an infrastructure revolution.”

What risks do data centres pose to insurers?  

It goes without saying that data centres are potentially rather risky assets to insure, from a variety of different angles – not just the physical aspects of them but also the digital impact any outage may have, and the security of the data contained in and processed by them. The fact they have CNI status alone confirms this. Risks include: power outages, water scarcity which could affect cooling systems, fires, impacts from extreme weather events and cyberattacks. 

However, there are a number of things insurers can do to mitigate against these risks: robust underwriting standards as a condition of providing cover, risk assessing power demands, insisting on back-up on-site power generation such as battery storage, ensuring enhanced fire suppression systems are in place that are checked regularly, and by requiring compliance with National Cybersecurity Centre guidance. Also, if an insurer insures multiple data centres, by mapping exposure and seeking to avoid a portfolio that is concentrated in any particular geographic location – this can help to manage claims from single events such as a power failure, flood or heatwave. 

“A typical hyperscale data centre can consume the electricity of around 85,000 homes.”

What are data centres and how
do they work?

A data centre is a building that contains large numbers of computer servers and storage systems that power all types of digital services: much of the internet, apps, email systems, as well as AI and, of course, for data storage. As of October 2026, there are 568 data centres in the UK (the number is increasing all the time). These range in size from smaller centres for a single organisation to vast hyperscale data centres, which are typically owned and operated by technology giants like Amazon, Google and Microsoft.

In the UK, data centres are designated as Critical National Infrastructure (CNI) and so are formally recognised by the Government as vital to the economy and the national interest.

It is the hyperscale data centres that get the most attention in the press and also with local communities where they are built (or proposed), due to their colossal size. For example, a hyperscale data centre planned for Auchtertool in Fife would have a footprint of up to 60 hectares (about 84 football pitches) and be up to 35 metres tall (equivalent to an 11-storey building).

Their physical size is far from the only consideration: two key demands of data centres are the electricity needed to power them and the water for cooling systems to prevent them from overheating.

A typical hyperscale data centre needs a continuous power supply of around 100-500 MW with some facilities requiring more. At the lower end that is 2.4 GWh of electricity every 24 hours, the equivalent of around 85,000 homes! By any measure that is a significant amount of electricity. That same data centre will also typically need between 3.8-19 million litres of water per day to keep everything cool – the same consumption as a town of 10,000-50,000 people.

“Data centres may be invisible to motorists, but they will be fundamental to automated mobility.”