Prime Highlights:
- Drax plans to convert part of its North Yorkshire power plant into a 100-megawatt data center by 2027, responding to growing demand for digital infrastructure.
- The data center will initially use electricity from the national grid, with potential to integrate power from Drax’s own plant in the future, safeguarding long-term electricity demand.
Key Facts:
- Drax has applied for planning permission near Selby, repurposing existing land, cooling systems, and transformers previously used for coal generation.
- The company emphasizes that it sources biomass from well-managed forests and avoids protected old-growth areas, maintaining a focus on sustainability.
Background:
Drax has unveiled plans to convert part of its North Yorkshire power station into a large-scale data center, aiming to meet the rapidly rising demand for artificial intelligence infrastructure. The FTSE 250 energy company confirmed on Thursday that it has submitted a planning application for a 100-megawatt facility at its Selby site, which once housed the UK’s largest coal-fired generation units.
According to the company, the proposed data center will make use of existing land, cooling systems and transformers previously used for coal operations before the plant was converted to burn imported biomass. Initially, the new facility will be powered by the national electricity grid, but Drax suggested that future operations may draw directly from its on-site generation capacity. The move is part of a broader strategy to secure long-term demand for its electricity output.
Drax’s announcement comes just weeks after the government indicated that subsidies for biomass generation would be reduced from 2026. In its latest trading update, the company said it expected earnings to reach the upper end of its forecasts, supported largely by more than £2 million per day in subsidies collected via consumer energy bills. Ministers have recently criticised the scale of these subsidies, arguing that they have not delivered sufficient value for the public.
The government also tightened sustainability rules, warning that Drax would face stricter penalties if it failed to use 100% sustainably sourced woody biomass, up from the current requirement of 70%.
The company has faced increasing scrutiny over where it gets its wood. Recent reports claimed that Drax was using wood from very old forests in Canada, even though it says it sources responsibly. Drax denies these claims, stating that it only uses wood from well-managed forests and avoids protected old-growth areas. Meanwhile, the Financial Conduct Authority continues to investigate historical disclosures made by the company regarding its biomass supply chain.
