| REPORT ATTRIBUTE |
DETAILS |
| Historical Period |
2020-2023 |
| Base Year |
2024 |
| Forecast Period |
2025-2032 |
| UK Data Center Liquid Cooling Market Size 2024 |
USD 166.17 Million |
| UK Data Center Liquid Cooling Market, CAGR |
24.51% |
| UK Data Center Liquid Cooling Market Size 2032 |
USD 960.00 Million |
Market Overview:
The UK Data Center Liquid Cooling Market is projected to grow from USD 166.17 million in 2024 to an estimated USD 960.00 million by 2032, with a compound annual growth rate (CAGR) of 24.51% from 2024 to 2032.
The growth of the UK data center liquid cooling market is driven by several critical factors. Firstly, the increasing density of data centers, propelled by the expansion of cloud computing, artificial intelligence (AI), and Internet of Things (IoT) applications, has intensified the need for efficient cooling solutions. Traditional air-cooling methods often fall short in managing the heat generated by densely packed servers, making liquid cooling a superior alternative due to its advanced thermal management capabilities. Secondly, there is a heightened focus on energy efficiency and sustainability, especially as energy costs rise and environmental regulations become stricter. Liquid cooling systems offer significant energy savings compared to conventional air-cooling systems, aligning with sustainability goals and reducing operational expenses. Additionally, advancements in liquid cooling technologies, such as immersion cooling and direct-to-chip cooling, have enhanced system efficiency and reliability. These innovations empower data centers to handle higher thermal loads effectively, meeting the escalating computational demands of modern digital applications.
The UK’s data center market is concentrated in key regions, with London and the South East leading due to their robust infrastructure and connectivity. These areas have a high concentration of data centers, attracting continuous investments to expand and upgrade facilities. However, there is a growing trend toward establishing data centers in other regions, such as the East Midlands and Scotland, driven by factors like lower operational costs, availability of land, and access to renewable energy sources. For instance, Scotland’s cooler climate and capacity for green energy through new wind farms make it an attractive location for data center development. This regional diversification aligns with the UK’s broader strategy to enhance digital infrastructure while promoting sustainability across the country.
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Market Insights:
- The UK Data Center Liquid Cooling Market is projected to grow from USD 166.17 million in 2024 to USD 960.00 million by 2032, with a CAGR of 24.51%.
- Increasing data center density, driven by AI, cloud computing, and IoT, is accelerating the adoption of liquid cooling for efficient heat management.
- Rising energy costs and sustainability mandates are pushing operators to adopt liquid cooling for improved efficiency and reduced carbon footprint.
- Advancements in immersion cooling and direct-to-chip cooling are enhancing performance, reliability, and cost-effectiveness.
- Growth in high-performance computing (HPC) across finance, healthcare, and research sectors is boosting demand for scalable liquid cooling solutions.
- London and the South East remain key markets, but regions like Scotland and the East Midlands are emerging due to lower costs and renewable energy access.
- High initial investment costs, integration challenges, and reliability concerns remain key barriers, but technological advancements and regulatory support are driving adoption.
Market Drivers:
Increasing Data Center Density
The surge in digital transformation, driven by the expansion of cloud computing, artificial intelligence (AI), and Internet of Things (IoT) applications, has significantly increased data center density in the UK. For instance, the number of IoT-connected devices globally reached 15.14 billion by 2023, reflecting a 75% increase since 2019, with projections to double by 2030. As the volume of data processed continues to escalate, the heat generated by high-performance computing systems becomes a pressing concern. Traditional air-cooling solutions often fall short in efficiently managing the thermal load generated by modern, densely packed server infrastructures. Liquid cooling technologies offer a highly effective alternative, providing superior heat dissipation and enabling data centers to sustain higher densities without compromising performance. This shift is encouraging data center operators to adopt liquid cooling solutions to enhance operational efficiency and meet evolving computational demands.
Emphasis on Energy Efficiency and Sustainability
The growing emphasis on sustainability and energy efficiency is another major driver for the adoption of liquid cooling solutions in the UK. Data centers are among the largest consumers of energy, and with rising electricity costs and increasing pressure to reduce carbon footprints, operators are seeking more sustainable cooling methods. For example, immersion cooling can reduce energy usage by up to 94% compared to traditional air-cooling methods, as demonstrated in tests at a data center owned by Japanese telecom firm KDDI. Liquid cooling systems are inherently more efficient than traditional air-cooling systems, reducing energy consumption and lowering operational costs. Moreover, liquid cooling aligns with broader environmental objectives by minimizing water usage and decreasing greenhouse gas emissions. As the UK government and regulatory bodies impose stricter environmental standards, the demand for sustainable and energy-efficient solutions like liquid cooling is expected to rise significantly.
Technological Advancements in Liquid Cooling
Continuous technological advancements in liquid cooling systems have significantly enhanced their appeal and adoption across the UK data center industry. Innovations such as immersion cooling and direct-to-chip cooling have revolutionized the efficiency and effectiveness of thermal management systems. For instance, Mitsubishi Heavy Industries (MHI) has developed a direct-to-chip system called HyperCool, which is being integrated into its data center equipment. These technologies not only provide superior cooling performance but also reduce the need for extensive infrastructure modifications, making them a cost-effective option for existing facilities. Furthermore, advancements in coolant materials and system designs have improved reliability and operational safety, ensuring uninterrupted data center operations. These innovations have addressed initial concerns regarding liquid cooling adoption, driving its integration into modern data center infrastructures.
Rising Demand for High-Performance Computing
The increasing demand for high-performance computing (HPC) in sectors such as finance, healthcare, and scientific research is also fueling the growth of the liquid cooling market. HPC systems generate significant amounts of heat due to their intensive processing capabilities, necessitating advanced cooling solutions. For example, average rack density is expected to increase from 8.5 kW per rack in 2023 to 12 kW per rack in 2024, highlighting the need for efficient cooling systems to manage these high thermal loads. Liquid cooling systems are well-suited to handle the high thermal loads associated with HPC, ensuring optimal system performance and reliability. Moreover, as AI and machine learning models become more complex, the need for efficient and scalable cooling solutions becomes critical. Liquid cooling technologies offer a strategic advantage by supporting the evolving requirements of HPC, thereby strengthening their position in the UK data center landscape.
Market Trends:
Growing Adoption of Immersion Cooling Technology
One of the most prominent trends in the UK data center liquid cooling market is the growing adoption of immersion cooling technology. This method involves submerging servers and IT equipment directly into non-conductive cooling liquids, allowing for efficient heat dissipation. Immersion cooling not only optimizes energy efficiency but also extends the lifespan of hardware by maintaining consistent temperatures. For instance, PeaSoup, a UK-based cloud provider, utilizes liquid immersion cooling to deliver a carbon-zero cloud service, reducing power consumption by 30% and increasing compute and storage capacity while minimizing environmental impact. As data centers face increasing pressures to reduce their carbon footprints and operational expenses, immersion cooling presents an effective solution. This trend is gaining momentum, especially in high-density data centers where traditional air-cooling methods are less effective. Additionally, immersion cooling systems require less physical space, enabling data centers to maximize their operational footprint.
Expansion of Edge Data Centers
The expansion of edge data centers across the UK is significantly influencing the demand for advanced liquid cooling systems. Edge data centers, which are smaller facilities located closer to data sources, are crucial for reducing latency and supporting real-time data processing. However, these facilities often operate in constrained spaces with limited access to traditional cooling infrastructure. Liquid cooling solutions, particularly compact and scalable systems, offer an ideal approach for managing thermal loads in such environments. The rise of IoT applications, autonomous vehicles, and 5G technologies is accelerating the need for edge data centers, subsequently driving the demand for efficient cooling solutions. For example, the UK’s new AI action plan includes significant investments in data centers, such as Nscale’s £2.5 billion investment, which highlights the growing demand for efficient data center infrastructure. This trend is expected to reshape the landscape of the UK data center industry, with liquid cooling playing a central role.
Focus on Reducing Total Cost of Ownership (TCO)
The focus on reducing the total cost of ownership (TCO) is becoming a key consideration for data center operators in the UK. While the initial investment in liquid cooling systems can be higher compared to traditional air-cooling systems, the long-term savings are substantial. Liquid cooling reduces energy consumption, minimizes hardware failure rates, and lowers maintenance costs, contributing to significant TCO reductions over time. For example, Trumonytechs’ liquid cooling solutions have been shown to cut cooling energy use by about 50%, resulting in a 40% reduction in cooling-related operating costs and a 35% decrease in hardware failures in a high-performance computing data center in Silicon Valley. Furthermore, liquid cooling systems often eliminate the need for extensive air-cooling infrastructure, such as chillers and large-scale ventilation systems, further reducing capital and operational expenses. As organizations continue to seek cost-effective and sustainable solutions, liquid cooling is increasingly viewed as a strategic investment.
Integration of Renewable Energy Sources
The integration of renewable energy sources with data center operations is shaping the liquid cooling market in the UK. Data centers are major energy consumers, and there is a growing emphasis on aligning operations with sustainability goals by utilizing renewable energy. Liquid cooling systems complement these efforts by enhancing energy efficiency and reducing environmental impact. For example, Park Place Technologies has introduced immersion liquid cooling and direct-to-chip cooling in the UK, focusing on improving energy efficiency and reducing carbon emissions. This trend reflects the broader industry shift towards eco-friendly practices and is encouraging data center operators to invest in liquid cooling technologies that support green energy integration.
Market Challenges Analysis:
High Initial Capital Investment
One of the primary restraints in the UK data center liquid cooling market is the high initial capital investment required for installation and deployment. Liquid cooling systems, particularly advanced solutions like immersion and direct-to-chip cooling, involve significant upfront costs. These expenses cover specialized equipment, infrastructure modifications, and skilled labor for installation. For small to medium-sized data centers, these costs can be prohibitive, limiting widespread adoption. Additionally, the transition from traditional air-cooling systems to liquid cooling requires careful planning and investment in new infrastructure, which may deter operators looking to minimize short-term expenditures.
Complexity of Integration and Maintenance
Integrating liquid cooling systems into existing data center infrastructure presents considerable challenges. Traditional data centers are designed primarily for air-based cooling, and retrofitting these facilities to accommodate liquid cooling solutions requires substantial modifications. This complexity extends to maintenance, as liquid cooling systems demand specialized skills and knowledge to ensure operational safety and efficiency. Any malfunction, such as leaks or coolant degradation, can lead to operational disruptions or equipment damage. The need for continuous monitoring and regular maintenance further adds to operational complexity, posing a barrier to adoption for organizations lacking technical expertise.
Concerns About System Reliability and Risk
Despite advancements in liquid cooling technology, concerns regarding system reliability and potential risks remain prevalent. Data center operators often perceive liquid cooling as riskier than traditional methods due to the involvement of liquids near sensitive electronic components. The fear of potential leaks, system failures, or coolant contamination contributes to hesitancy in adopting these systems. Additionally, the limited availability of long-term performance data for newer cooling technologies intensifies these concerns. To overcome this challenge, market players must focus on educating stakeholders and demonstrating the reliability and safety of modern liquid cooling systems through case studies and industry certifications.
Market Opportunities:
The growing emphasis on sustainability and energy efficiency presents a significant opportunity for the UK data center liquid cooling market. As environmental regulations become stricter and energy costs continue to rise, data center operators are increasingly seeking innovative cooling solutions that minimize energy consumption and reduce carbon footprints. Liquid cooling systems, known for their superior energy efficiency compared to traditional air-cooling methods, are well-positioned to meet this demand. Their ability to lower power usage effectiveness (PUE) and enhance operational efficiency aligns with the sustainability goals of modern data centers. Moreover, as organizations adopt net-zero emission targets, the demand for energy-efficient cooling solutions is expected to increase, opening substantial growth opportunities for liquid cooling technologies.
The rapid expansion of high-performance computing (HPC), artificial intelligence (AI), and cloud services in the UK also presents a robust opportunity for the liquid cooling market. These technologies generate significant heat loads, requiring advanced cooling systems to maintain optimal performance and prevent equipment failure. Liquid cooling, with its superior thermal management capabilities, is ideally suited to support the needs of these high-density computing environments. Additionally, the rise of edge computing and the establishment of smaller, decentralized data centers further create opportunities for compact and efficient liquid cooling solutions. As these technological advancements continue to shape the data center landscape, the demand for advanced cooling systems is expected to surge, offering significant market potential for liquid cooling providers.
Market Segmentation Analysis:
The UK Data Center Liquid Cooling Market is segmented based on type, application, component, and industry vertical, each playing a crucial role in shaping market growth.
By Type, the market is divided into Direct Liquid Cooling and Indirect Liquid Cooling. Direct Liquid Cooling is gaining traction due to its superior heat dissipation and efficiency in managing high-density computing environments. Indirect Liquid Cooling, while less efficient, remains a preferred option for retrofitting existing data centers with minimal infrastructure changes.
By Application, the market includes IT Equipment Cooling, Power Supply Cooling, UPS Cooling, and Others. IT Equipment Cooling dominates due to the increasing adoption of AI, cloud computing, and IoT, which generate significant heat loads requiring efficient cooling solutions.
By Component, key segments include Chillers, Cooling Distribution Units, Heat Exchangers, Pumps, and Others. Chillers and heat exchangers are essential for maintaining optimal operating temperatures, while pumps and cooling distribution units facilitate efficient liquid flow, ensuring effective heat removal.
By Industry Vertical, the market serves BFSI, IT and Telecom, Government, Healthcare, and Others. The IT and Telecom sector leads the market due to the rapid expansion of hyperscale and colocation data centers. The BFSI sector follows, driven by growing data security and storage demands, necessitating advanced cooling technologies. The government and healthcare sectors are also adopting liquid cooling to support critical infrastructure and medical research applications.
Segmentation:
By Type Segment
- Direct Liquid Cooling
- Indirect Liquid Cooling
By Application Segment
- IT Equipment Cooling
- Power Supply Cooling
- UPS Cooling
- Others
By Component Segment
- Chillers
- Cooling Distribution Units
- Heat Exchangers
- Pumps
- Others
By Industry Vertical Segment
- BFSI (Banking, Financial Services, and Insurance)
- IT and Telecom
- Government
- Healthcare
- Others
Regional Analysis:
The UK’s data center industry is predominantly concentrated in specific regions, each contributing uniquely to the market’s expansion:
London and the South East: Historically, London and its surrounding areas have been the epicenter of data center operations in the UK. The proximity to financial institutions, enterprises, and robust connectivity infrastructure has solidified this region’s dominance. It’s estimated that London and the South East account for approximately 70% of the UK’s data center capacity. This concentration has led to a substantial adoption of liquid cooling solutions to meet the high-density computing demands prevalent in this area.
Midlands and North of England: Regions such as Manchester, Leeds, and Birmingham have emerged as significant players in the data center landscape. These areas offer cost advantages, availability of space, and improving connectivity, making them attractive for data center investments. Collectively, the Midlands and North of England contribute about 20% to the national data center capacity. The growth in these regions is accompanied by an increased implementation of liquid cooling technologies, driven by the need for energy efficiency and sustainability.
Scotland: Scotland is positioning itself as a burgeoning hub for data centers, leveraging its cooler climate and access to renewable energy sources. The Scottish government’s identification of 20 prime sites for green data centers highlights this ambition. Currently, Scotland accounts for approximately 5% of the UK’s data center capacity, with expectations of growth as investments in infrastructure and renewable energy integration continue.
Wales and Northern Ireland: These regions are gradually entering the data center market, focusing on niche opportunities and leveraging local advantages. Combined, they represent around 5% of the UK’s data center capacity. As these markets develop, there is potential for increased adoption of liquid cooling solutions, especially in specialized data center operations.
Key Player Analysis:
- Schneider Electric
- Stulz
- Vertiv
- Asetek
- CoolIT Systems
- LiquidCool Solutions
- Green Revolution Cooling (GRC)
- Iceotope Technologies
- Submer
Competitive Analysis:
The UK data center liquid cooling market is moderately concentrated, with a mix of global leaders and innovative local firms competing to enhance energy efficiency and support high-density computing. Key players include Schneider Electric SE, a leader in energy management and automation, offering comprehensive liquid cooling solutions that strengthen its market presence. Vertiv is another major player, known for its critical infrastructure solutions. In December 2023, Vertiv collaborated with Intel to develop pumped two-phase liquid cooling for the Gaudi3 AI accelerator, highlighting its commitment to innovation. For instance, Telehouse has launched a liquid cooling lab in the UK, partnering with Accelsius, JetCool, Legrand, and EkkoSense to provide customers with access to various liquid cooling technologies. In July 2024, the company launched Iceotope Labs in Sheffield, focusing on high-density computing research and testing. Additionally, Mitsubishi Electric Corporation contributes with energy-efficient cooling technologies. As sustainability and energy efficiency remain top priorities, these companies continue to invest in advanced liquid cooling solutions to meet regulatory and operational demands.
Recent Developments:
- In February 2024, a significant development in the data center cooling sector involved the acquisition of a controlling stake in DDC Cabinet Technology, a leader in extreme-density cooling solutions, by the investment backers of TierPoint, a multi-tenant cloud and colocation provider.
- In March 2025, Accelsiusannounced its participation in Data Centre World London, where it showcased its innovative two-phase, direct-to-chip liquid cooling technology. This event marked a significant step in Accelsius’ expansion in Europe, following its recent partnership with Telehouse, a leading data center service provider. The partnership aims to enhance AI data center performance and efficiency.
- in March 2025, Vertivunveiled its latest liquid cooling solutions at Data Centre World London. Vertiv showcased its Vertiv Liebert XDU1350 coolant distribution unit, part of the Vertiv CoolChip CDU family, which can operate with or without facility water.
Market Concentration & Characteristics:
The UK data center liquid cooling market exhibits a moderately concentrated structure, with a few dominant players driving innovation and expansion. Established global corporations, such as Schneider Electric, Vertiv, and Mitsubishi Electric, leverage their extensive expertise and technological advancements to maintain a competitive edge. Meanwhile, domestic firms like Iceotope Technologies are emerging as key innovators, focusing on precision immersion cooling solutions. The market is characterized by a strong emphasis on energy efficiency, sustainability, and high-performance computing. As data centers increasingly adopt liquid cooling to manage rising heat loads from AI and cloud applications, the demand for advanced cooling solutions continues to grow. Additionally, stringent environmental regulations and rising energy costs push companies to develop more efficient and eco-friendly cooling technologies. The presence of both global leaders and specialized local firms fosters a dynamic competitive landscape, where continuous innovation and regulatory compliance shape the market’s evolution.
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Report Coverage:
The research report offers an in-depth analysis based on type, application, component, and industry vertical It details leading market players, providing an overview of their business, product offerings, investments, revenue streams, and key applications. Additionally, the report includes insights into the competitive environment, SWOT analysis, current market trends, as well as the primary drivers and constraints. Furthermore, it discusses various factors that have driven market expansion in recent years. The report also explores market dynamics, regulatory scenarios, and technological advancements that are shaping the industry. It assesses the impact of external factors and global economic changes on market growth. Lastly, it provides strategic recommendations for new entrants and established companies to navigate the complexities of the market.
Future Outlook:
- The UK data center liquid cooling market is projected to witness sustained growth, driven by increasing adoption of high-density computing and AI workloads.
- Rising energy costs and stringent carbon reduction targets will accelerate the shift toward more efficient liquid cooling technologies.
- Continued advancements in direct-to-chip and immersion cooling solutions will enhance thermal management efficiency and reduce operational costs.
- Expansion of hyperscale and colocation data centers will fuel demand for scalable and modular liquid cooling systems.
- Government regulations on sustainability and energy efficiency will push data center operators to invest in eco-friendly cooling solutions.
- The integration of renewable energy sources with liquid cooling infrastructure will gain traction to support carbon-neutral data center initiatives.
- Increased R&D investments by key market players will drive innovation and improve the cost-effectiveness of liquid cooling solutions.
- Growth in edge computing will create new opportunities for compact and efficient liquid cooling technologies in smaller data centers.
- Strategic partnerships between technology providers and data center operators will accelerate market expansion and solution deployment.
- The competitive landscape will evolve with new entrants offering specialized and customized liquid cooling solutions to meet evolving industry needs.
