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Data centres eligible for funding under IETF

Government explicitly includes data centres in the scope of the Industrial Energy Transformation Fund.

Government has published their response to the consultation on the Industrial Energy Transformation Fund (IETF). This makes funding available for large energy efficiency projects that will not be achieved under market forces.  The funding is restricted to improving the efficiency of industrial processes (as opposed, say, to transport). There are two phases, the first provides funding for energy efficiency deployment projects and feasibility studies and the second phase will also provide funding for large scale demonstration / deployment of deep decarbonisation projects.

We responded to the consultation on Government’s initial proposals which limited scope to manufacturing sectors and therefore excluded data centres. We submitted two responses in which we asked for the proposals to be less proscriptive and explained that there are opportunities in data centres for large projects where the payback is too long to present acceptable ROI. Our main request was to leave the door open for data centre projects, rather than try to pre-define what might be eligible.  You can find our responses here:

We also held a follow up call with the team responsible within BEIS and operators provided useful examples of the types of projects that might be enabled by such funding.

In the Government’s response they have retained the restrictions they proposed to limit funding to industries within a set band of SIC codes. However they have made an exception for data centres, which are explicitly included.  Government has listened to the sector and responded by expanding the scope of the scheme to include data centres. You can find the full document here:

The next step will be to review the implications and establish how we can make best use of the provision available. Government schemes of this kind are usually accompanied by a number of hoops for applicants to jump through, designed to ensure that taxpayers’ money is used responsibly. 


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