Tech firms call for zonal electricity pricing in UK to fuel AI datacentres

Tech companies are putting pressure on the UK government to encourage an AI datacentre boom in remote areas of Great Britain by offering some of the cheapest electricity prices in Europe. A report paid for by the tech companies Amazon and OpenAI has called on ministers to overhaul the UK's electricity market by splitting it into different zones so that prices become more expensive in areas where power is in short supply, and cheaper in those where it is ample. This market arrangement, known as zonal pricing, would make areas such as Scotland a hotspot for AI datacentres – which use vast amounts of electricity – because of an abundance of windfarms and low population density, according to the report by the Social Market Foundation (SMF) thinktank. Keir Starmer said last month that artificial intelligence would be "mainlined into the veins" of the nation after putting in place a sweeping action plan to make the UK a world leader in the technology. However, the plans to host datacentres have attracted some scepticism, in part because the UK has some of the highest industrial electricity prices in the world and is pressing targets to virtually eliminate fossil fuels from the power system by the end of the decade.