Planning and Infrastructure Bill

Committee (7th Day)

My Lords, I would like to remind noble Lords that we have a large number of groups on this Bill to get through today. While this is Committee, I rise to remind noble Lords of the guidance in the Companian at paragraph 8.81 on speeches at the amending stages of Bills:

“Members taking part in debate at an amending stage should not use their speech simply to summarise or repeat at length points made by others. They should not make ‘second reading’ speeches or make discursive interventions which are not relevant to the amendment(s) under discussion”.

While there have many important contributions from all sides of the Committee, parts of our recent debates have strayed into Second Reading speeches and away from the amendments. So that we can make progress on the remaining groups, I therefore ask all noble Lords to ensure that their remarks on further amendments are relevant to the topic under discussion, and brief.

Amendment 185N

185N: After Clause 52, insert the following new Clause— “Energy consumption of AI and technology-related infrastructure(1) The Secretary of State must, within 18 months of this Act coming into force, prepare and publish a National AI Energy Efficiency Strategy for the purposes of informing planning policy and guiding the development of artificial intelligence and technology-related infrastructure under this Act, in so far as it relates to energy consumption.(2) For the purposes of this section, “artificial intelligence and technology-related infrastructure” includes, but is not limited to—(a) data centres,(b) high-performance computing facilities,(c) server farms,(d) AI research, training, and testing facilities, and(e) any other installations primarily designed to support AI and large-scale digital processing.(3) The purpose of the strategy is to—(a) balance the energy demands of artificial intelligence against the energy efficiencies enabled by artificial intelligence,(b) achieve a national objective of ensuring that AI energy use is better than carbon neutral before 2030, and(c) support the integration of AI-enabled efficiencies into national energy planning.(4) The projected energy consumption of a proposed development and its contribution to national energy efficiencies, as set out in the National AI Energy Efficiency Strategy, shall be treated as material planning considerations.(5) An application for planning permission relating to such infrastructure must be accompanied by an assessment covering—(a) the expected level of energy demand arising from the development,(b) proposed measures to improve the energy efficiency of the development, and(c) proposed steps to reduce or mitigate the impact of energy consumption on local and national energy supply. (6) In determining an application to which this section applies, a planning authority must have regard to—(a) the extent to which the development will utilise renewable or other low-carbon sources of energy, and(b) the consistency of the development with the National AI Energy Efficiency Strategy.(7) The Secretary of State must issue guidance specifying minimum energy efficiency standards for such infrastructure.(8) Planning authorities must have regard to guidance issued under subsection (7) in exercising their functions under the Planning Acts.(9) Planning conditions attached to permissions under this section must include local arrangements enabling independent AI-related energy sources to provide surplus capacity to the national grid at times of surplus or at times of national demand, including requirements for grid-balancing.(10) The Secretary of State must, not later than 18 months after the publication of the National AI Energy Efficiency Strategy, and every three years thereafter, lay before Parliament a report reviewing—(a) the progress made in reducing the energy consumption of AI and technology-related infrastructure,(b) the contribution of such infrastructure to national energy efficiencies,(c) the effectiveness of planning conditions imposed under this section, and(d) whether additional measures are required to meet the objectives set out in subsection (3)(b).”Member’s explanatory statement This amendment seeks to make the energy use and efficiency of AI-related infrastructure a statutory planning consideration supported by a national strategy, guidance, and reporting duties.

My Lords, in opening this group of amendments on AI infrastructure and community energy I will move my Amendment 185N and speak also to Amendment 185P. The simple truth is that AI’s energy and water demands are outpacing our development of policies to regulate AI’s energy and water usage. AI’s expected energy usage is due to go up from 7 terawatt hours to 62 terawatt hours by 2050, which is enough to power 27 million homes. Some estimate that it could go up to 71 terawatt hours by 2050. AI is exceptionally power-hungry just at the pinch point when we are desperately trying to reach clean power.

Against this background, our overall electricity demand is set to double by 2050. SMRs will help, but we should note that they will not come online until the mid-2030s. Meanwhile, many big tech companies are rowing back from their clean energy targets; Google is one example. This Bill is notably silent on AI, meaning that planning frameworks lack explicit provisions to assess or moderate the substantial energy and water demands of AI. I believe that, with the right legislation, we can make provision to require that AI is used for public good by ensuring that its power is also applied to finding ways we can drive national energy savings and efficiencies. AI is a powerful tool used to drive energy efficiencies, for example by enhancing the electricity grid, providing stability and efficiency and improving forecasting and integrations of variable amounts of new renewable energy generation and unlocking substantial transmission capacity savings without the need for new power lines.

More widely, AI can be used to heat and cool our buildings, improve our transport sector and to improve any number of industrial processes requiring large amounts of energy. So there is potential for huge savings by employing AI. This amendment would require the Secretary of State to publish a national AI energy efficiency strategy within 18 months. This would establish projections of energy use as material planning considerations and mandate developers to account for both supply and efficiency measures in their applications. The measure also aims to ensure that surplus energy resources from data centres can be fed back into the national grid at times of energy need.

My Amendments 185R and 185S would place community energy at the heart of our planning and energy future. I welcome the fact that community energy was included in the Great British Energy Act’s statement of objectives after a cross-party campaign in both Houses of Parliament. I also welcome the commitment given in the other place that the Government will work to ensure a right to supply locally, which would enable community energy schemes to sell the clean power they generate directly to local homes and businesses. I would welcome an update, if possible, on how that is progressing.

My Amendment 185R seeks to ensure that planning authorities consider, wherever possible, how new developments can incorporate community energy, whether through shared solar projects, locally owned battery storage, direct heating schemes or simply ensuring that surplus energy remains available in the community rather than disappearing into the grid. Well-designed community energy projects not only decarbonise but build resilience, reduce bills and generate a direct sense of ownership and pride among our communities. For example, as I have mentioned before in debates on the Bill, I would like to see our seaside towns and communities benefiting from local wind generation schemes. I have been careful in my wording: I have put in a duty to “have regard to”, so this is not about enforcement but is designed to be flexible.

Amendment 185S complements this by recognising that good intentions at the planning stage are insufficient without practical guidance and support. The Secretary of State would be required to publish community energy guidance within 18 months and to keep it updated every three years. Even when planning consent exists for renewables in a development, barriers remain when local people try to supply energy directly to each other. At present, community initiatives struggle with disproportionate licensing rules, arcane market requirements and costs that may be trivial for multinational suppliers but are crippling to parish and neighbourhood groups. This amendment would oblige the Government to provide clear measures, enable local supply licences or exemptions, clarify transparent and affordable terms for customers and make sure that processes are not burdensome for the very groups we rely on to lead community projects.

Together, these amendments would help to create a more localised, energy-based, distributive participatory system, where local people are active partners and beneficiaries. Working with and supporting communities allows them to more directly benefit from the energy transition and helps to maintain public support for that transition as we head towards net zero. I recognise the work that the Government are actively doing in this area, and I remain open to further discussions and working with alternative methods of progressing these matters on Report. I beg to move.

My Lords, I welcome the amendments in the name of the noble Earl, Lord Russell. He referred to two different utilities. Energy should, in effect, be unlimited in the resource available, but it is concerning to a number of communities that, suddenly, energy projects, substations and so on are popping up around the country and lots of planning applications are going in alongside them from solar farms and for other significant uses of data, including data centres and other AI infrastructure. As a consequence, what proportion of grade 1, grade 2 and grade 3a land is now being taken up with planning applications, due to not only solar farms but all the AI-related infrastructure to which the amendments refer? I do not know whether the Minister has that information; if not, I would be grateful if she could write to us.

On Amendment 185P, unlike electricity and energy, water is very much a constrained utility in this country. The amount of water available to keep powering homes, businesses and other activities, including energy stations, is significantly under threat. That is one reason why there will be one of the most significant contractions in the amount of water available to the farming sector in just two years’ time. There is something to be said about the amount of water that we think will be used by AI data centres and the like. At the moment, there seems to be no thinking about how we prioritise the different industrial sectors across our country. Nor am I aware—I am sure that the Minister will correct me if I am wrong—that we are necessarily considering this in planning guidance, although there will be something more widely about whether water is available. This is a really important activity and the Government should absolutely be looking at it, regardless of whether this goes into the Bill.

When I did the plan for water, on making sure there was a clean supply of water—that was part of the intention—and thinking ahead, I do not think that we had really given much thought to this sort of consumption that we are now due to have. To give an example, one reason for the major delays to Sizewell C was that, all of a sudden, the water company responsible said that it could not necessarily guarantee the amount of water to be used in the construction and operation of the nuclear energy plant. That has led to Sizewell C having to think about desalination plants and reservoirs but, at the moment, there are constraints on how some of these things can be spread across sectors in the generation of a nuclear energy station. It is imperative that we think about where else this could happen; to be serious, in terms of the building planned and business growth in the east of England, after Sizewell C was given its consent, no other business has been eligible to get or ask for any more water.

My Lords, I suspect that many noble Lords across your Lordships’ House are not yet fully aware of the growth, scale and significance of what we call AI-related infrastructure—the hardware and software required to create, train and deploy AI-powered applications and solutions. If we are to fully harness the benefits of AI, unlocking these new efficiencies, fuelling economic growth and creating opportunities for infrastructure investment, we must be mindful of the practical impacts that come with it, as the noble Earl, Lord Russell, and my noble friend Lady Coffey have pointed out, with the two key areas being energy use and water.

As the noble Earl has highlighted, the sheer computational power required for advanced AI models is immense, leading to rising energy demand. Equally, the cooling systems necessary for AI data centres can involve significant water usage. These are important considerations and it makes sense that our planning system and national guidance should take them into account to ensure that infrastructure growth is both sustainable and resilient. I do not believe it is the noble Earl’s intention that these amendments hold back innovation; rather, they call for statutory recognition of these impacts within the planning system, supported by a clear national strategy, guidance and reporting requirements. That seems to me both proportionate and sensible.

The noble Earl’s Amendments 185R and 185S rightly highlight the urgent challenge of climate change and the central role that planning and development must play in addressing it. Their emphasis on ensuring a resilient and sustainable built environment is both timely and welcome, and I place on record our appreciation of the sentiment behind them. At the same time, however, it is important to strike a balance, supporting sustainability while avoiding overly burdensome requirements or excessive regulation that could impede housing delivery or economic growth. I look forward to hearing from the Minister how the Government intend to respond to these concerns.

My Lords, I thank the noble Earl for his amendments on AI infrastructure and community energy projects. He is absolutely right to highlight the issue of the water and power required by data centres. Before I respond, I should say that we need to be very proud of our AI in this country. We have the third largest AI market in the world. The AI sector was valued at £72 billion in 2024 and is projected to be worth over £800 billion by 2035. Over £44 billion of investment has been announced for data centres in the UK since July 2024, which is a very good record, but of course the noble Earl raises some very important issues that run alongside this.

Turning first to Amendment 185N, noble Lords will be aware that we had an in-depth discussion in Committee last week on overheating and climate change, and I appreciate the intent behind this amendment of considering this matter in the context of emerging AI technologies. During my time as a Minister—and until last week I had responsibility for AI in my department; it has moved on now—I had the chance to see some of the real opportunities that AI presents. It has the potential to transform our public services, secure growth and raise living standards, and not least to support our colleagues in planning in order to help them move things on much more quickly. It is this Government’s ambition to harness it for the good of our country, which is why we are actively monitoring the data centre sector and published the first government Estimate of Data Centre Capacity in May 2025, which includes measures indicating energy use.

Some data centre applications will have the option of being consented through the nationally significant infrastructure project regime. Officials from the Department for Science, Innovation and Technology are in the process of developing a national policy statement to guide this process, which will also be treated, importantly, as a materially significant consideration in the local authority-led planning process. This statement will include an assessment of the sustainability of the sector, and we are aiming for publication in 2026. The Government have also, as the noble Earl mentioned, established the AI Energy Council, co-chaired by the Secretaries of State for DSIT and DESNZ, to provide expert insight into the energy needs of AI and the role of AI in an efficient and sustainable energy system. To do this, the council has established a sustainability working group which will explore options to accelerate the development of low-carbon energy solutions to power AI, tools to reduce carbon emissions from AI, and metrics to support energy efficiency.

This Government are also championing community and local energy. Through the local power plan, community energy projects will be empowered, bringing real and tangible benefits to their local areas. Great British Energy will also provide commercial, technical and project planning assistance to those community energy projects, increasing the capability and capacity to build a pipeline of successful projects in local communities across the UK.

Amendment 185S proposes the creation of new guidance by the Secretary of State to support the supply of community energy from new housing developments, ensuring local access, affordability and effective participation. As the noble Earl may remember, community energy is now explicitly referenced in the Great British Energy Act under its objects, meaning that Great British Energy may facilitate, encourage and participate in projects involving or benefiting local communities.

I want to reassure the noble Earl that the local power plan will aim to empower local communities to establish renewable generation projects that bring a real benefit to their area. The Government recognise the request to take steps to better enable local energy trading to lower consumer bills and ensure that local communities directly benefit from local energy. That is why DESNZ is working closely with Ofgem, Great British Energy and other key stakeholders to determine how best to support matching local generation with local demand.