The UK government has designated a site in North Wales as an AI Growth Zone, where it pushes private companies to build data centers and AI hubs.

Alongside the Anglesey Freeport project, the government said that it was reforming planning and power policy to make data center development faster and cheaper.

AI Growth Zones were first announced in January as a way to incentivize and speed up data center development in the UK. Zones were announced in Oxfordshire and Cobalt Park near Newcastle. Another is rumored for Teeside.

The UK government claimed that the new AI Growth Zone will add 3,450 jobs, including temporary and construction roles.

The new AI Growth Zone straddles the Menai Strait, with locations at Prosperity Parc on Anglesey and another at Trawsfynydd, Gwynedd.

The Zone appears to piggyback on an existing proposed project, with Prosperity Parc’s owner, Stena Line, pitching a 238,000 sqm (2.5 million sq ft) data center and Battery Energy Storage System (BESS) back in late 2024. The £1 billion facility did not have a timeline, nor an end customer, and has yet to receive full approval.

For the reworked Zone announcement, an investment partner has yet to be secured, but the government said that it expected to find one in the coming months. Stena Line is listed as a growth zone consortium lead.

The North Wales designation comes as Wylfa on Anglesey has been named as the site of the country’s first small modular reactor (SMR) nuclear power station.

It is set to be delivered by state-owned Great British Energy–Nuclear and is expected to use Rolls-Royce SMRs. The location could host up to eight reactors, and supply grid power from the mid-2030s. Wylfa is currently home to a Magnox nuclear power station undergoing decommissioning.

“We said we’d make AI work for Britain – and now we’re putting our money where our mouth is,” Prime Minister Keir Starmer said.

“These Growth Zones aren’t an abstract conception; they’re about thousands of jobs, real investment, and change for communities that have been short-changed for too long.”

The government said that it was adopting new measures to speed up AI deployments, with Zones given priority access to available grid capacity.

The nation will spend £4.5 million ($5.9m) on a new AI planning team to support local councils across the UK with expert advice and funding for planning and approving new AI Infrastructure.

Data centers in AI Growth Zones will get “significant discounts” on their electricity bills, the UK government said – but only if they are located in areas that could help to reduce the pressures on the energy network.

Developers “could” be supported to connect their own high voltage lines and substations to power their data centers.

Planning guidance has also been updated for AI infrastructure projects, which the government said will reduce waiting times from four years to “as little as” two.

The moves were welcomed by local data center operator Kao Data.

CCO Spencer Lamb said that “if implemented from April 2027, a 500MW data centre in an AI Growth Zone could see annual electricity costs fall by – Scotland: £24/MWh, Cumbria: £16/MWh, [and the] North East: £14/MWh.

“To put that into perspective, running 500MW for a year in the UK today is close to £900m. Under the new model, that drops to around £839m in the North East and £795m in Scotland.”

However, Lamb added, “even with these reductions, we remain well behind international competitors. The same 500MW costs roughly £700m in France, £438m in Spain, £219m in the United States, and £215m in the Nordics.”