Microsoft has terminated its agreement for Nscale's planned Loughton data centre in Essex, as the project continues to face a grid connection timetable extending into the 2030s. The withdrawal puts a direct commercial consequence alongside the electricity constraints already affecting the delivery of large AI and hyperscale developments across the UK.
Reuters reported on 18 October that Microsoft had recently ended its agreement for the Loughton project. The report said the reason for Microsoft's withdrawal had not been specified, although the scheme has faced repeated delays and national power-grid officials had told Nscale that supply to the data centre was not expected until the 2030s.
Nscale said its wider relationship with Microsoft remains strong and long-term, describing the difficulty at Loughton as a London-wide grid issue that does not affect its other contracts. The developer also said it remains committed to the Essex project and is exploring alternative power sources for the site, alongside additional UK expansion locations.
Grid connections, substations and long-lead electrical infrastructure are increasingly shaping the programme for major UK data-centre developments. Illustration: London Construction Magazine.
Loughton Was Planned Around 50MW of Initial Capacity
When Nscale acquired the Loughton site in January 2025, the company described it as capable of supporting 50MW of AI and high-performance computing capacity, with the power allocation scalable to 90MW. At that stage, Nscale was targeting Q4 2026 for the facility to become operational.
The commercial proposition became substantially larger in September 2025 when Nscale and Microsoft announced plans for what they described as the UK's largest AI supercomputer. The published programme called for 23,040 NVIDIA GB300 GPUs to be deployed from Q1 2027, supporting Microsoft Azure services from an initial 50MW installation that could scale towards 90MW.
That sequence now provides a live example of the programme risk examined earlier by London Construction Magazine's analysis of grid power and the UK data-centre build-out. A development can have land, planning progress, a major technology customer and a defined compute requirement while still being unable to align the building programme with the electricity infrastructure needed to operate it.
Planning Has Progressed but Main Construction Is Unclear
The Loughton scheme is not simply an early land option. Planning records for the Alandale Scaffolding site at Langston Road show an established permission route based on outline consent EPF/1165/22, followed by a Section 73 application, EPF/0388/26, approved in June 2026. Reserved matters covering appearance and landscaping were also approved under EPF/0404/26 on 25 June.
Further condition-discharge work has continued during 2026. Surface-water drainage details were approved in July, archaeology and Secure by Design matters progressed during August, and the construction management plan condition was approved on 23 September. Other condition applications, including flood-risk and contaminated-land matters submitted in September, remained within the planning process in the latest records reviewed.
That planning activity establishes a more advanced position than a simple announcement, but London Construction Magazine could not verify a public main-construction contract award or a confirmed main works start from the material reviewed for this article. It therefore remains important to distinguish planning progression from physical delivery, particularly where the operational programme depends on an electricity connection several years beyond the dates originally associated with the project.
Grid Reform Is Moving Into the Construction Programme
The Loughton problem sits within a much larger demand-connection queue. Ofgem said in July that demand connection applications had increased from 41GW to 125GW in less than a year, driven largely by data centres, which accounted for at least 80GW. Around 73GW of data-centre demand is referenced within the regulator's current reform work.
The proposed reforms are particularly relevant to construction because Ofgem wants large data-centre projects to demonstrate that they have a credible end user, the financial and technical capability to proceed and evidence that long-lead electrical equipment such as switchgear is being procured. Electricity connections are therefore becoming tied more closely to commercial maturity and procurement rather than being treated as a utilities matter that can be resolved after the shell and core programme has been established.
That change also affects where construction opportunity appears. LCM has previously examined the competition for electrical capacity across London development, where data centres, housing and other major schemes can depend on the same constrained substations, network reinforcement and connection programmes.
For contractors, the immediate implication is not that every data-centre package disappears when a grid date moves. It is that civils, shell and core, substations, high-voltage cabling, transformers, switchgear, cooling, MEP installation and commissioning increasingly have to be programmed around a credible route to energisation. Where that route changes, phasing and procurement can change with it, particularly on high-density AI facilities whose commercial purpose depends on very large continuous electrical loads.
Nscale says it is now exploring alternative power sources for Loughton while also considering other UK expansion sites. The next material delivery milestone will therefore be whether one of those routes produces a credible power programme capable of supporting a revised construction and customer timetable for the Essex scheme.
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