Summary
- Scottish Financial Enterprise chief Sandy Begbie told MSPs that moratorium language was proving negative with investors.
- The intervention adds an investment consequence to Scotland’s debate over data-centre power, environmental impact, and economic value.
- Future policy will have to distinguish between where large facilities can be accommodated and whether development should proceed at all.
Scottish Financial Enterprise has warned that calls for a moratorium on new data-centre development are creating a negative signal for investors, adding a capital-allocation consequence to Scotland’s debate over AI infrastructure, electricity demand, and environmental constraints.
Chief executive Sandy Begbie gave evidence to the Scottish Parliament’s Economy, Tourism and Energy Committee on 8 September as MSPs examined AI and its impact on Scotland’s economy.
Begbie said the “current tone” of the data-centre debate was “proving to be quite negative with investors”.
He added: “Words like moratorium send very much the wrong message to investors about the opportunity that exists.”
The Scottish Greens and campaigners have called for a moratorium on new hyperscale developments amid concerns over their electricity consumption and environmental impact.
Begbie argued instead for a more proportionate approach and said Scotland risked losing investment if it failed to respond quickly to growing AI infrastructure demand.
The intervention does not resolve the objections surrounding large facilities.
Scotland has substantial renewable generation, but a new data centre can still require major transmission capacity, substations, backup systems, cooling equipment, land, fibre, and other supporting infrastructure.
Large campuses can also compete for network capacity with industry, housing, transport electrification, and other forms of electricity demand. The relevant question is therefore not simply how much renewable power Scotland produces, but whether the grid can deliver the required capacity at a particular site and time.
Planning creates another source of tension. Communities can face the physical effects of large industrial buildings, substations, generators, transmission works, construction traffic, and cooling plant even where the digital services supported by the facility are consumed elsewhere.
Investors, meanwhile, are sensitive to policy uncertainty because development decisions require substantial expenditure before a data centre begins generating revenue.
A proposal can spend years securing land, planning permission, grid capacity, design approvals, contractors, and customers. If developers believe the policy environment may shift materially during that period, the risk can influence site selection before any formal moratorium exists.
That is the commercial consequence behind Begbie’s evidence.
European data-centre developers compare markets on grid access, planning risk, land, construction cost, taxation, connectivity, customer demand, and the likelihood that policy requirements will change before completion.
Scotland’s renewable generation and available land may improve its position on some of those measures, but political uncertainty can work in the opposite direction.
There is also a risk in approving projects without a clear infrastructure framework. If electricity, water, environmental impact, community effects, and local economic benefit are not addressed credibly at the start, individual planning disputes can build pressure for broader restrictions later.
A more durable policy would therefore have to identify where large loads can be accommodated, what evidence developers must provide, how environmental impacts are measured, and what conditions should apply to power, cooling, resilience, and planning.
The debate is increasingly about location and infrastructure conditions rather than a simple choice between unrestricted development and no development.
That distinction is becoming more relevant as UK policy explores ways of directing data-centre demand towards parts of the electricity system where additional load may be easier to accommodate.
Begbie’s warning adds an immediate investment consequence. Policy does not have to reach the statute book before it affects development decisions. If boards conclude that Scotland carries greater planning or political risk than competing European markets, projects can move elsewhere before an application reaches a council.
