The 2026 NPPF: Implications for Data Centre Developments

On 17^th August 2026, the Government published the latest version of the National Planning Policy Framework (the “2026 NPPF”), replacing the December 2024 iteration. The 2026 NPPF follows an extensive consultation and represents another significant step in the wider adoption of data centres into the planning regime. Data centres were designated as critical national infrastructure in September 2024 and were introduced into the nationally significant infrastructure project (“NSIP”) regime in January 2026, though the Government is yet to publish the national policy statement that will govern data centre NSIP applications.

While the 2026 NPPF contains broader shifts for plan making (including increased focus on densification and support for development on railways), this article focuses on its treatment of data centres and AI Growth Zones (“AIGZs”).

Policies E1 & E2: Allocation of Sites for Data Centres

Policy E1 consolidates and updates the previous paragraphs 86 and 87 of the 2024 NPPF. While it retains the requirement for local plans to make provision for data centres, E1 now explicitly requires LPAs to consider and provide priority places for AIGZs. The Government has set strict minimum requirements for AIGZ status, including sufficient water and power supply for AI infrastructure, so designation is not automatic.

Importantly, Policy E1 no longer refers to data centres in isolation. It expressly requires plans to provide for “data centres and associated generating capacity, and electricity network infrastructure to provide grid connections.” The policy framework now recognises energy infrastructure as part of the planning need — relevant to schemes involving onsite generation, battery storage, renewable generation, substations, and other power infrastructure.

Policy E2 also presents new ground in data centre planning. It provides that, to support business growth, substantial weight should be given to: 

1. the economic benefits of proposals for commercial development which allow businesses to invest, expand or adapt, 
    
2. proposals that support the implementation of the Government’s Industrial Strategy, which includes the development of AI as part of the Government’s wider commitment to developing ‘Digital and Technologies’, and 
    
3. proposals that include AI Growth Zones. 

While the ‘substantial weight’ direction is not specific to data centres, it is highly relevant because data centres are precisely the type of commercial development that Policy E1 is designed to facilitate.

The 2026 NPPF also addresses co-location within data centres for the first time. Specifically, policy E2(2)(b)(ii) provides that, where a development proposal is required to demonstrate unmet need (as is increasingly the case with data centres across the UK), consideration should be given to the specific locational requirements (including water availability and grid connections), and the opportunities to co-locate large-scale generators alongside data centres. If implemented properly by local planning authorities (“LPAs”), this policy may provide support to the wider issue of obtaining grid connections for data centres by allowing co-location with generation assets, thereby enabling data centres to secure power through a direct private wire or behind-the-meter connections to the co-located generation assets rather than relying on the constrained public grid. 

This is potentially one of the most significant changes for applicants. Policy E2(2)(b)(ii) provides a national policy basis for a particular site potentially being suitable specifically because it has access to the infrastructure necessary for a data centre. This could be particularly powerful where a site has an existing or committed grid connection, proximity to a substation, co-located generation, access to renewable generation, or other infrastructure that makes it unusually suitable for a high-energy-use data centre. 

Flood Risk: Designation as ‘Essential Infrastructure’

Another significant change in the 2026 NPPF is the inclusion of data centres within “Essential Infrastructure” in the flood risk vulnerability classification set out in Annex F (Table 2). This places data centres in the same category as essential transport and utility infrastructure, wind turbines, solar farms, hydrogen production facilities, carbon capture and storage facilities, heat networks and electric vehicle charging stations. 

The practical implication is that data centre planning becomes more streamlined in flood-risk areas. Essential Infrastructure is appropriate in Flood Zone 1 without restriction, in Flood Zone 2 without the need for an exception test, and in Flood Zones 3a and 3b subject to the exception test (Policy F6(1)(b)) and operational safety requirements. This should be materially more permissive than the “Less Vulnerable” or “More Vulnerable” classifications in the 2024 NPPF, reflecting the Government’s recognition that data centres may need to be located in areas of higher flood risk but which offer  options for proximate water supply for cooling and other operational uses, or have other locational benefits.

Use of model Planning Obligations

Permissions for data centres are often subject to lengthy s106 Agreements. Under Policy DM6, the Government has strengthened its position on model planning obligations, stating that “where national model planning obligations are relevant to the development, they should be used unless there are strong reasons for using a different planning obligation.”

The Government has published model obligations for medium housing sites, though it has not indicated whether it will develop equivalents for commercial developments. If it does, this could significantly reduce s106 negotiation times, particularly for smaller enterprise or co-location data centres that may not require bespoke obligations.

Development within the Green Belt 

Larger hyperscale or cloud data centres are often situated on the periphery of settlements, which (particularly in the South East) frequently means engaging with the Green Belt. The 2026 NPPF does not create any bespoke Green Belt exception for data centres — development remains inappropriate unless it falls within policy GB7, and inappropriate development "should not be approved except in very special circumstances". However, recent recovered appeals, such as at Abbots Langley, show the Secretary of State granting permission for hyperscale data centres in the Green Belt on the basis of substantial wider benefits.

Development inside and outside of Settlements 

The new Policy S4 establishes the principle for development within settlements, providing that proposals should be approved unless their benefits would be “substantially outweighed by any adverse effects”. This creates a generally permissive framework for development (including data centres) within settlement boundaries, subject only to certain limited exceptions – such as where the proposal would have a substantial adverse impact on land safeguarded for particular uses, or would fail to comply with specific restrictive national decision-making policies. This will be of particular benefit to smaller scale developments, such as co-location or retail data centres. 

Separately, the new Policy S5 governs development outside settlements (though it does not apply in the Green Belt). Policy S5(1)(a) permits "engineering operations and infrastructure (including for transport, energy, water and telecommunications)" outside settlements. While data centres are not explicitly named, this category could potentially capture them.

Updated Definition of Renewable and Low Carbon Energy: Recovered Heat

The 2026 NPPF also makes a targeted but significant change to the definition of “renewable and low carbon energy”, which has been expanded so that low carbon technologies now expressly include “heat from recoverable sources (such as heat recovered from data centres)”. This sits alongside, and reinforces, other provisions in the 2026 NPPF that already encouraged the co-location of heat suppliers and users and the use of decentralised heat networks, including Policy CC2(1)(e) (taking advantage of opportunities to co-locate energy and heat generators and users, especially suppliers of surplus heat) and Policy W2(1)(b) (identifying opportunities for development to draw its heat supply from decentralised networks and to co-locate suppliers of surplus heat or energy).

This amendment is potentially significant, as proposals which capture and export excess heat may now be treated as, or benefit from, a “renewable and low carbon energy development” in their own right, engaging the substantial weight afforded under Policy W3 and the benefits recognised under Policy CC2(2). In practice, this may encourage LPAs to expect data centre applicants to evidence the temperature, volume and availability of recoverable heat, and to explore heat off-take arrangements with nearby heat networks, as part of the planning application. Developers and operators should therefore treat heat recovery and off-take strategy as a live planning consideration from the earliest design stages: it may strengthen the planning case for a proposal, but it may equally translate into an expectation, or in due course a requirement, to make waste heat available to the surrounding area.

Comments and Conclusion

These reforms mark a further step towards a planning regime that is broadly permissive of data centre development, but they also expose several unresolved issues that practitioners should watch closely. These include: 

1. The classification of data centres as Essential Infrastructure for flood risk is not limited by size, type or function – hyperscale AI facilities and modest enterprise operations alike fall within its scope.
    
2. Similarly, while the 2026 NPPF does not create a Green Belt exemption for data centres, the strength of the national need case underpinning Policies E1 and E2 may generate increasing pressure on Green Belt land, particularly in the South East, where power and connectivity infrastructure is concentrated but developable land remains scarce. This tension seems likely to be tested through further planning appeals and call-in decisions.
    
3. Further uncertainty arises from the co-location provisions introduced by Policy E2(2)(b)(ii), particularly where the proposed generation assets would be sufficiently large to qualify under the NSIP regime. The consultation document signalled that directing the energy generation element of a co-located scheme into the same consenting regime as the data centre itself “may be appropriate”, which may see developers needing to rely on the new ‘opt-out’ powers afforded by section 35B of the Planning Act 2008. The relationship between the NPPF’s express support for data centres and the emerging AIGZ programme may, in practice, create a two-tier system whereby proposals within designated AIGZs benefit from streamlined planning and priority grid access, while those outside (notwithstanding the backing of national policy) face a less supportive environment. It also remains to be seen whether the Government’s focus on AIGZs will align with commercial reality, given that different types of data centre (edge, co-location, hyperscale, AI) have distinct locational requirements, and that end users of data centre capacity will ultimately drive investment decisions based on their own operational and connectivity needs.
    
4. The 2026 NPPF does not create a blanket presumption that data centres should be approved. Normal development plan policies still apply, including those relating to climate, biodiversity, landscape, Green Belt, flood risk, design, and transport. The significance of the 2026 reforms is that the economic and locational case for data centres is now much more explicitly supported at national level, providing a considerably stronger policy framework than existed under the 2024 NPPF.