Edinburgh councillors have torpedoed plans for a massive "green" AI datacenter, voting it down despite city planners recommending approval.
The City of Edinburgh Council's Development Management Sub-Committee refused planning permission in principle for the facility, which would have been built on the former Royal Bank of Scotland headquarters site in South Gyle. The proposal covered a campus of datacenter buildings, pitched as supporting AI workloads and backed by renewable energy commitments.
City planners gave the project the nod [PDF], saying its benefits justified bending rules designed to preserve a mixed-use, "thriving" neighborhood. Councillors took a different view and lined up with campaigners and environmental opponents after hours of wrangling.
The project, backed by property investor Shelborn Asset Management, was expected to deliver up to 213 MW of IT capacity, placing it among the larger compute builds proposed in Scotland. Backers framed the site as relatively eco-friendly, citing new cooling technology and promises of public green space and sports facilities.
Opponents were unconvinced, outlining concerns about emissions, backup power systems, and the project's alignment with local planning priorities.
Environmental campaign group Action to Protect Rural Scotland (APRS), which opposed the project, hailed the decision as a landmark moment in the growing fight over hyperscale infrastructure.
"This is an absolutely momentous decision," said APRS director Dr Kat Jones, adding that the debate exposed a broader industry problem since both planning officials and councillors repeatedly questioned what qualifies as a "green datacenter."
"The lack of a clear definition of a 'green datacenter' is a glaring issue that will be faced by every hyperscale facility coming through the planning system," she said, calling for a temporary pause on approvals while environmental impacts are reassessed.
Campaigners had already warned the site would rely on rows of diesel backup generators to keep the servers humming during power cuts. Critics said that alone clashed with the project's green marketing and underscored how power-hungry AI infrastructure has become.
The rejection lands amid growing tension between local planning politics and national ambitions to scale up digital infrastructure. The UK government has been working to elevate datacenters to critical national infrastructure, framing them as essential to public services, finance, and AI development.
Regulatory changes are also creating fast-track approval routes for major datacenter developments, allowing some projects to bypass local planning authorities in favor of national sign-off.
However, ministers have already been forced into an awkward climbdown after admitting they made a "serious error" by intervening in a datacenter planning case without properly considering environmental safeguards.
Edinburgh's vote highlights the increasingly fraught balancing act facing developers. Government and industry tend to describe datacenters as essential to Britain's AI and digital future, but local councils and campaign groups are taking a harder look, questioning the energy use, environmental impact, and what gets squeezed out when land is handed over to compute campuses.
For now, the South Gyle proposal joins a growing list of contested UK datacenter projects – proof that while demand for AI compute may be accelerating, securing permission to build the infrastructure behind it is anything but plug-and-play. ®