A former oil and gas rig production site in Dunoon, Scotland, is set to be transformed into a data center campus.

Developers of the site, dubbed the Killellan AI Growth Zone and located on the Cowal Peninsula in the west of Scotland, are hoping to become one of the UK government’s AI Growth Zones, which will offer incentives to encourage data center projects.

Work is set to start on preparing the land in the coming weeks, according to a report in The Herald. It formerly housed a factory and quarry where rigs for the oil and gas industry were built, and at one time employed 3,000 people.

According to the project website, an initial 100MW-600MW of data center capacity will be delivered in stage one of the project, with an aspiration to eventually achieve 2GW. Argyll Data Development Ltd, which is leading the scheme, says it will be powered by on-site renewable energy comprising a mix of solar, wind, hydro, and hydrogen-powered sources, and using vanadium-based flow batteries for storage, but has yet to provide further details on how this will work.

Speaking to The Herald, Peter Griffith, chairman of Argyll Data Development, said the first data center on the site will be used to manage a microgrid initiative the company is also pursuing. It is hoped it will connect to up to 32 Edge data centers located on microgrids around the UK, and help them manage the energy produced at the facilities.

Total funding of £15 billion ($20.3bn) is likely to be required for Killellan project, and Griffith said his company is considering options for funding the scheme. It hopes to have the first phase up and running by 2027.

Partner companies listed on the Argyll Developments website include Schneider Electric, its industrial software subsidiary Aveva, and Lenovo. Argyll and Bute MSP Jenni Minto is among those backing the project’s bid for AI Growth Zone status.

Scotland has not traditionally been a data center hotspot, though since the AI Growth Zone initiative was announced, several of its regions have confirmed they have submitted bids, including North Ayrshire, Dumfries and Galloway, and the city of Glasgow.