AI datacentre project planned for Yorkshire power plant site

Initially, Drax will provide land and access to the national power grid. The company anticipates directly supplying power to the datacentre by the early 2030s.

This development is viewed as a potential “next chapter” for the Drax site, especially as government plans to restrict its power generation are underway. Drax CEO Will Gardiner stated the project would “help secure the long-term future of the site and protect hundreds of jobs” while supporting regional reindustrialization and bolstering the UK’s AI capabilities.

Drax, the FTSE 250-listed owner of the power plant, generates nearly 5% of the UK’s electricity using woody biomass pellets, making it the largest carbon dioxide emitter in the country. The UK government does not currently factor these emissions into its calculations, based on Drax’s claim that the carbon released is offset by the absorption of carbon dioxide by growing trees.

Government subsidies for Drax are set to be halved from 2027 to 2031, prompting the company to seek regulatory approvals to directly supply the datacentre before 2031 to safeguard future revenue streams. The news positively impacted the company’s market value, which rose nearly 9% to approximately £3 billion on the London Stock Exchange.

The first phase of the project, slated for completion in the first quarter of 2028, will include a datacentre with up to 100MW of compute capacity.

The announcement follows the recent release of a government draft policy statement emphasizing the importance of datacentres to the UK economy, comparing them to railways and electricity networks. The government aims to ensure that both the country and local communities benefit from datacentre development.

However, concerns remain regarding the UK’s grid infrastructure and climate targets, raising questions about powering the growing demand for datacentres without relying on potentially expensive and environmentally damaging gas generation.