Download As PDF

Artificial intelligence and cloud computing are driving a rapid expansion of data centres. They are often presented as symbols of progress, bringing investment and employment. Yet beneath the headlines lies a question that deserves much more attention.

Economist Tim Morgan recently observed:

“There’s another aspect of this that’s worrying. If somebody builds a data centre in your locality, what happens to your cost of electricity and water, when they’ve got effectively bottomless pockets?”

This question goes to the heart of the localist argument.

Electricity and water are not unlimited resources. Every locality has finite generating capacity, finite distribution networks and, increasingly, finite water supplies. A large data centre may consume as much electricity as a small town and millions of litres of water each day for cooling. When such a development arrives, it becomes a powerful new competitor for essential resources.

The owners of these facilities are often among the wealthiest corporations in the world. They can afford to pay prices that ordinary households, farms and small businesses cannot. Even if they negotiate long-term contracts, the extra demand they create still requires investment in new infrastructure. Ultimately those costs are often spread across everyone else.

The result is that local people may find themselves paying higher prices for electricity and water, while having little influence over decisions that affect their daily lives.

This illustrates one of the weaknesses of an economy organised around perpetual growth. New developments are assessed mainly by the value of the investment and the contribution to national output. Much less attention is given to the effect on the resilience of the locality itself.

Localism asks a different question.

Instead of asking whether a project increases national GDP, it asks whether it strengthens or weakens the ability of the locality to provide for its own people. Does it leave enough affordable electricity for homes, workshops and local industries? Does it protect water supplies for farming, food production and daily life? Does it improve the long-term security of the community?

In an age of growing resource constraints, these questions become increasingly important.

A shrinking economy makes the issue even more significant. As energy becomes more expensive and investment capital becomes scarcer, every kilowatt of electricity and every litre of water become more valuable. Local communities cannot assume that additional supplies will always be available.

This suggests that essential resources should increasingly be regarded as strategic assets belonging first to the locality. Major industrial users should demonstrate not only that they can pay for these resources, but also that their use does not reduce the resilience and prosperity of the surrounding community.

Future planning may therefore need to move beyond traditional economic assessments. Before approving major developments, localities may need to ask whether they can genuinely afford to allocate scarce electricity and water to activities whose principal benefits flow elsewhere.

The debate is therefore not about opposing technology. Data centres undoubtedly have a role in modern society. The question is one of priorities.

When resources become constrained, should communities compete with global corporations for the essentials of life, or should those essentials first secure the well-being of the people who live there?

That is a question localism is uniquely equipped to answer.