Data-Centre Economics 2025: Edge vs Hyperscale

EXECUTIVE SNAPSHOT
AI workloads, latency-critical apps, and grid constraints are reshaping the UK data-centre market. This report compares the economics of hyperscale campuses (40 MW+) with regional and micro edge facilities, revealing when smaller footprints outperform mega-scale builds.

WHY IT MATTERS
• Hyperscale land is scarce and power-hungry.
• Edge sites demand less grid capacity and capture premium rents from low-latency services.
• Developers must balance CAPEX, OPEX, and location-based energy pricing to stay competitive.

KEY THEMES INSIDE

1. Land & Power Realities – GIS-enabled site scoring plus parallel pre-apps shorten critical paths.
2. Cost Benchmarks – CAPEX of £1,400 / kW for hyperscale vs £1,600–£1,800 / kW for edge—but edge earns 20–50 % higher rent per kW.
3. Grid Strategy – Location-based tariffs and private-wire renewables can trim edge energy costs by up to 20 %.
4. Heat-Reuse Upside – Waste heat from 10 MW regional centres can feed district networks and unlock ESG credits.
5. Business-Model Scenarios – Profit-margin table: 20 % (hyperscale), 22 % (regional edge), 12.5 % (micro edge).
6. Portfolio Approach – A hub-and-spoke mix of 10–20 MW edge nodes plus select hyperscale campuses offers resilience and speed-to-market.

WHO SHOULD READ IT
• Developers weighing land bids or grid-connection timing
• Investors evaluating returns under DESNZ / Ofgem tariff reforms
• Local authorities assessing AI Growth-Zone proposals
• Energy strategists exploring co-location with renewables

TOP TAKE-AWAYS
• When an edge centre reaches ~10 MW, per-kW CAPEX drops sharply, closing the economy-of-scale gap.
• Regional edge facilities secure 20–50 % rent premiums for latency-sensitive workloads.
• Phased, modular edge builds reduce upfront risk and match capacity to demand curves.
• Coordinated grid upgrades can unlock broader housing and commercial growth around edge clusters.
• A complementary portfolio—hyperscale for bulk compute, regional edge for latency—future-proofs against power-price volatility.

ABOUT THIS PAPER
Authored by Third Revolution’s Economics & Digital-Infrastructure team, the report combines market data, cost benchmarks, and project insight to give decision-makers an evidence-based roadmap for the next wave of UK data-centre delivery. Download it to refine your feasibility models and strengthen funding cases.

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