Bank of England Governor Andrew Bailey said on Friday that artificial intelligence may need to be rationed. Not regulated, not taxed — rationed. His argument is blunt: the power grid cannot keep pace with the energy appetite of AI systems, and if it can't, governments and companies will face hard choices about which sectors get access first. Speaking to a financial audience, Bailey framed this not as a future problem but a present one. The question, he said, is not whether AI can do more — it clearly can — but whether we can power it doing so.
This matters to Scottish SMEs for two reasons. First, if AI compute becomes a constrained resource, prices rise and access narrows. The businesses that benefit most from AI today — the solopreneur using it to punch above their weight, the small team using it to move like a large company — are exactly the ones who get squeezed first when supply tightens. The International Energy Agency reported earlier this year that global data centre electricity consumption could double by 2026, reaching over 1,000 terawatt-hours annually. That is not a background statistic. That is the bottleneck Bailey is warning about.
Second, and here is where Scotland enters the story: Bailey's warning is a live advertisement for everything Scotland already has. The UK's renewable energy mix hit a record 58% of generation in 2023, according to National Grid ESO figures — and a disproportionate share of that generation sits in Scotland. Wind capacity in Scotland already exceeds domestic demand on many days, with surplus energy regularly exported south or, absurdly, curtailed because the grid can't absorb it. Scotland does not have an energy shortage. It has an energy routing problem. Putting AI compute infrastructure here — data centres that run on surplus Scottish wind and hydro — would transform a waste problem into an economic and social asset.
The waste heat story sits right underneath Bailey's concern, and it deserves its own paragraph. AI server farms generate enormous heat as a direct by-product of computation. That heat can warm homes, hospitals, schools, greenhouses, and district heating networks — for free, or close to it. A data centre in Fife or the Highlands running on Scottish renewables would power AI for the rest of the UK while heating the community around it. The technology exists. The energy exists. The policy appetite exists at Holyrood. What has moved slowly is Westminster-level infrastructure planning and, critics argue, quiet resistance from incumbent energy suppliers who benefit from homes staying on gas and electric heating rather than receiving free thermal output from a nearby server farm. Follow the money, as ever.
Scottish Enterprise and Highlands and Islands Enterprise have both flagged data centre infrastructure as a strategic priority within Scotland's digital economy ambitions. The Scottish Government's National Strategy for Economic Transformation identifies digital infrastructure as a growth pillar. Bailey's comments, intentionally or not, have now given that agenda a very senior UK-level endorsement — even if he didn't mean to. If AI energy is going to be rationed, the rational move is to locate AI compute where the energy is cleanest, cheapest, and most abundant. That is Scotland. Edinburgh-based businesses should be asking their MSPs, their business associations, and their local councils: when does the first serious AI infrastructure campus with community heat-sharing break ground here? The ingredients are ready. The blueprint exists. The Governor of the Bank of England just explained why we can't afford to wait.