UK’s most polluting power plant could power country’s largest AI datacentre
Britain’s most polluting power plant could soon power the country’s largest datacentre under a £20bn deal to build AI infrastructure on the site of the Drax power plant in North Yorkshire.
The FTSE 250 owner of the power plant has struck a deal with the infrastructure investor Brookfield and the AI infrastructure platform Radiant to develop a datacentre with an eventual capacity of more than 1 gigawatt. The project could begin operations by early 2028, with an initial phase providing up to 100MW of compute capacity.
In the initial phase, Drax will provide the datacentre project with land and access to the national power grid through existing connections on the site. The company hopes to begin powering the datacentre directly by the early 2030s, a move it says will help secure the long-term future of the site and protect hundreds of jobs.
The project would help secure the long-term future of the site and protect hundreds of jobs while supporting the north’s reindustrialisation and strengthening sovereign AI capability.
The development could attract more than £20bn in investment and represent the next chapter for the former power plant after ministers signalled plans to limit its power generation in the future. The company’s market value climbed by almost 9% on the London Stock Exchange to almost £3bn.
The largest power plant in the UK produces almost 5% of the country’s electricity by burning woody biomass pellets, making the site the single largest emitter of carbon dioxide. These emissions are not accounted for by the UK government because Drax claims the equivalent carbon emissions are absorbed by growing trees that provide the waste wood used to make the biomass pellets.
The government has promised that Drax would play a much more limited role in the future after growing concerns over the company’s sustainability claims. The company will have access to only half its current £2m a day subsidies from 2027 to 2031.
The company hopes to clear the regulatory approvals needed to begin supplying the datacentre directly before 2031 to secure its future revenues. The deal has emerged a week after the government published a draft national policy statement on datacentres which said they were as fundamental to our economy as the railways and electricity networks.
However, the UK’s congested grid infrastructure and ambitious legally binding climate targets have raised questions over how a dash to build datacentres could be powered without relying heavily on expensive and polluting off-grid gas generation.
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