Data centre energy suppliers, tariffs and costs

Data centres and server hosting businesses are the backbone of our digital world, providing the infrastructure necessary for online services, cloud computing, and data storage. These facilities are energy-intensive, requiring constant power to maintain servers, cooling systems, and backup generators. Efficient energy management is crucial for these businesses to ensure reliable service delivery and control operational costs. With the rapidly increasing demand for data processing and storage capacity, data centres must continually adapt their energy strategies to maintain sustainability and competitiveness. Understanding the unique energy needs and exploring competitive tariffs can significantly impact the bottom line for data centre operators.

How much does energy cost for a data centre?

There is no published price list for data centres and server hosting businesses. What a data centre pays is set mainly by how much it uses in a year, because suppliers price by consumption band, and then by contract length, meter type, payment method and credit history. The most recent government figures (first quarter of 2026, provisional) put the average unit price paid by UK non-domestic customers at 24.14p per kWh for electricity and 5.17p per kWh for gas, including the Climate Change Levy and excluding VAT. A year earlier the averages were 25.74p and 5.54p. The smallest sites pay the most per unit: businesses using under 20,000 kWh of electricity a year averaged 35.02p per kWh, and those using under 278,000 kWh of gas averaged 7.48p per kWh.

Source: Department for Energy Security and Net Zero, Prices of fuels purchased by non-domestic consumers in the UK (Quarterly Energy Prices tables 3.4.1 and 3.4.2), published 30 June 2026. Q1 2026 figures are provisional; next update 29 September 2026. Prices are fully delivered averages including the Climate Change Levy and all other elements except VAT, so standing charges are already spread across the units. Averages across every UK business in a band, not quotes.

Working out a monthly figure for your business

Take the annual kWh from your latest bill or annual statement, find the band above and multiply. A site using 15,000 kWh of electricity a year sits in the very small band: 15,000 × 35.02p is about £5,250 a year, or roughly £440 a month before VAT. A site using 60,000 kWh of gas a year: 60,000 × 7.48p is about £4,490 a year, or roughly £375 a month. Because the smallest band pays a much higher unit rate, a data centre that moves into the next band by growing, or that sits near a band boundary, can see its per-unit price change noticeably at renewal.

VAT and the Climate Change Levy on business energy

The prices above exclude VAT. Business energy normally carries VAT at 20% plus the Climate Change Levy (CCL). HMRC applies the 5% reduced rate, with no CCL, in three cases. First, low usage: supplies averaging no more than 33 kWh of electricity a day (1,000 kWh a month) or 145 kWh of gas a day (4,397 kWh a month) are treated as domestic use whoever the customer is. Second, fuel and power for domestic use, which HMRC defines to include homes providing care for the elderly or disabled, children’s homes, hospices and school or university residential accommodation. Third, a charity’s non-business activities. Where a site is mixed, 60% or more qualifying use means the whole supply is charged at 5%; below that the supply is split between the two rates, and the customer gives the supplier a certificate declaring the qualifying percentage. Source: HMRC VAT Notice 701/19 (sections 2.8, 3.2 to 3.5, 4.2 and 5.2, updated 5 February 2025) and gov.uk VAT rates.

Is a data centre a microbusiness?

Ofgem treats a business as a microbusiness if it has fewer than 10 employees (or their full-time equivalent) and an annual turnover or balance sheet total of no more than £2 million, or if it uses no more than 100,000 kWh of electricity or 293,000 kWh of gas a year. A business can be a microbusiness for one fuel and not the other. Independent data centres and server hosting businesses that meet either test are covered by Ofgem’s microbusiness rules, which give extra protections around contract terms and renewals (Ofgem: get energy for your business).

Do business energy rates vary by region?

Yes. Part of every unit rate covers the cost of the local electricity distribution network, and Great Britain has 14 licensed distribution areas each with its own charges, so identical contracts are priced differently in, for example, the north of Scotland and London. DESNZ does not publish non-domestic prices by region, so regional figures quoted elsewhere are supplier or broker estimates rather than official statistics.

Which energy supplier is best for data centres and server hosting businesses?

No supplier specialises in data centres and server hosting businesses or publishes tariffs specific to them. The cheapest supplier for one business is often not the cheapest for the next, because each prices on the consumption band, meter type, contract length and credit profile in front of it. Compare the total annual cost of like-for-like contract lengths rather than the headline unit rate, and check the standing charge and any out-of-contract rate before signing.

Energy usage profile for Data centre and server hosting

Data centres and server hosting facilities typically exhibit high energy consumption patterns due to the continuous operation of servers and associated cooling and security systems. Energy usage remains consistent throughout the day and night, with peak demands often aligning with maintenance activities and backup system tests. The energy demand is primarily driven by the need to maintain optimal temperatures to prevent hardware overheating, ensuring data integrity and uptime. Consequently, these businesses prioritize energy efficiency and innovative cooling solutions to manage their substantial energy requirements effectively.

What affects bills for Data centre and server hosting

Several factors influence energy bills for data centres and server hosting services, including:

• Type and efficiency of cooling systems used.
• Operational hours and server workload.
• Location and climate, affecting cooling demand.
• Energy efficiency of server hardware.
• Contract terms and tariff structure with energy providers.
• Implementation of energy-saving technologies and practices.

How to compare tariffs

When comparing energy tariffs for data centres, consider the following checklist:

• Evaluate the tariff structure: fixed vs variable rates.
• Consider the contract length and flexibility.
• Check for any hidden fees or charges.
• Look for green energy options to enhance sustainability.
• Analyse peak and off-peak rate differences.
• Examine the provider's track record in servicing data centres.

Gas vs electricity considerations

For data centres, electricity is the primary energy source due to its role in powering servers and cooling systems. Gas is generally less relevant unless used for specific backup generation systems or heating needs. The focus for these businesses is typically on securing reliable, cost-effective electricity supplies while exploring renewable options to reduce carbon footprints. Efficient electricity management is vital to ensuring continuous uptime and operational efficiency.

Switching process overview

Switching energy providers for a data centre involves several key steps:

1. Review current energy contract terms and notice periods.
2. Collect and analyse energy usage data and requirements.
3. Research and compare potential providers and tariffs.
4. Negotiate terms and ensure they meet operational needs.
5. Coordinate the switch date to ensure uninterrupted power supply.

More business energy guides

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