Drax plans one of Britain's biggest AI data centres at its power station, with up to £20bn of backing

The first 100MW could be running from 2028, but there is no customer yet, the bigger phases need government approval, and campaigners say a wood-burning power station is the wrong place to power AI.

Britain's biggest power station wants to become one of its biggest AI data centres. Drax, the FTSE 250 company that runs the Drax Power Station near Selby in North Yorkshire, has signed a deal with the investment giant Brookfield and its AI infrastructure arm, Radiant, to build data centre capacity of more than a gigawatt on the site. Brookfield estimates the total investment, including the chips inside, could exceed £20bn.

The announcement, made to the stock market on Tuesday morning, sent Drax shares up by around 9%. It is the clearest sign yet that the race to host AI computing in Britain is turning towards the places that already have what data centres need most: land, a grid connection and their own power.

What has been agreed

Drax says it has signed an agreement to develop a strategic partnership with Brookfield and Radiant, a UK-headquartered company that Brookfield backs. The money and operating know-how will come through a joint venture between Brookfield and Qai, a Qatar-based AI company, which the two set up in 2025. Radiant will lead on design, finding customers and running the business. Drax will handle the land, the power and the planning.

The plan comes in three stages. The first targets up to 100 megawatts of computing capacity, drawing power from the national grid through the station's existing connections, and aims to be running from the first quarter of 2028. Drax says that alone would make it one of the largest data centres currently in the UK, and Brookfield puts the initial investment at £2.5bn.

The second stage is an ambition, not a commitment: options for a further 500MW between 2028 and 2031, powered directly by the station's own generators under a long-term supply deal. A third stage after 2031 would add more on the same basis. Taken together, the partners say the site could reach gigawatt scale.

Why Drax, and why now

The Drax estate covers more than 1,000 acres and has about 4GW of grid access and 2.6GW of generating capacity that can be switched on when needed. That is unusual. As we reported when Microsoft walked away from the Loughton data centre in Essex, the hardest thing for an AI project in Britain is often getting enough electricity to the site, and the wait for a new connection can stretch into the 2030s.

Drax's chief executive, Will Gardiner, made exactly that pitch. "Drax Power Station is one of the few UK sites that can provide large-scale reliable power directly to data centre customers by utilising existing and underutilised generation capacity," he said. If it is built in full, he added, the project "could become one of the largest data centres in the UK".

There is a business reason too. The power station burns wood pellets and supplies almost 5% of Britain's electricity, according to the Guardian, but its subsidies are shrinking. Under a contract agreed with the government in November 2025, Drax will generate about 6TWh a year from April 2027 to March 2031, around 30% of its current output, and the Guardian reports it will receive about half its current subsidy. That contract includes a mechanism for Drax to ask to use up to 500MW to power a data centre, but the government and the Low Carbon Contracts Company have to agree, weighing value for money, energy security and sustainability.

What is not yet settled

A lot. Drax is clear that the first phase depends on planning permission, regulatory and grid approvals, finding an acceptable tenant, negotiating commercial agreements and every partner taking a final investment decision. No customer has been named, and Radiant says it will look for anchor customers before construction starts.

The £20bn figure is Brookfield's estimate of what the whole development could attract if every phase goes ahead, and it includes the cost of the computer chips. It is not money that has been committed today. A planning application for the first phase is being prepared, and Drax says public consultation should start this month. The partners also plan a voluntary community benefits fund for people living around the site.

The carbon question

Drax has long been one of Britain's most controversial power stations. Analysts quoted by the Guardian describe it as the country's single largest emitter of carbon dioxide. Drax argues that burning wood is low-carbon because new trees absorb the carbon again, a claim that researchers and campaigners dispute.

Critics were quick to respond. The US-based Natural Resources Defense Council said last month that running the proposed data centre would release nearly double the annual emissions of flights from Gatwick, the BBC reports. Owen Espley of the charity Global Action Plan told the BBC that the extra demand would "make it impossible" to meet clean energy targets.

The timing is awkward. On the same day, a BBC File on 4 investigation found that four planned "hyperscale" data centres are considering gas-fired power while they wait for a grid connection. The government says data centres are essential to the economy, and that its new Data Centre Covenant asks developers to limit water use, pay their fair share of energy costs and benefit local communities. The Drax partners say their plans fit the covenant's main criteria.

The UK angle

For ministers, this is the sort of project they have been asking for. Science minister Chris McDonald called it "a strong vote of confidence in the UK". A week earlier the government published a draft national policy statement describing data centres as being "as fundamental to our economy as the railways and electricity networks".

It is also the second big power-for-AI story in Britain in a week, after National Grid agreed to buy land for the UK's biggest substation on Teesside. Both point to the same shift: AI computing is heading north, to old industrial sites with big grid connections. Radiant's chief executive, Mahdi Yahya, said the aim was to give British researchers, start-ups and businesses "access to frontier compute at home".

What's next

Watch for the start of public consultation this month, the planning application for phase one, and above all a named customer. Without a tenant the first 100MW will not be built. The second phase also needs government approval to let the power station supply the data centre directly. If both go ahead, a site built to burn coal and then wood could end up running AI models by the end of the decade.