Drax has revealed plans to convert part of its power plant in North Yorkshire into a datacentre as soon as 2027 in response to the increase in demand for AI capability.
The FTSE 250 company behind Britain’s biggest power plant told investors on Thursday that it had applied for planning permission to build a 100-megawatt datacentre at its site near Selby.
The centre is expected to use the land, cooling systems and transformers that were once dedicated to the power plant’s coal generation before Drax converted its generators to burn imported wood pellets.
The first datacentre to be built on its site will draw electricity from the UK’s national electricity grid, but in future there could be potential to use electricity from the Drax plant.
The company set out the plans to safeguard demand for its electricity in its latest trading update, weeks after the government signalled that it would curb the amount of electricity it would subsidise from 2026.
The trading update suggested that Drax would make profits at the upper end of its guidance, largely thanks to subsidies of more than £2m a day that are drawn from energy bills to support the controversial burning of biomass as a renewable energy source.
The government said the subsidies offered to Drax “simply did not deliver a good enough deal for bill payers and enabled Drax to make unacceptably large profits”. It also said Drax would face substantial penalties if it failed to use 100% woody biomass from sustainable sources, up from the current level of 70%.
The Guardian revealed last month that a report by forestry experts had found that Drax continued to burn 250-year-old trees sourced from some of Canada’s oldest forests despite growing scrutiny of its sustainability claims.
That followed a 2022 report by the BBC that detailed similar findings, and the start of investigation this year by the City watchdog, the Financial Conduct Authority, over “historical statements” made by Drax about the sourcing of wood pellets to examine whether the company had complied with disclosure and transparency rules. The investigation is ongoing.
The report by the Canadian NGO Stand.earth suggested it was highly likely that Britain’s biggest power plant sourced some wood from ecologically valuable forests as recently as this summer even while lobbying the government for further subsidies.
Drax dismissed the report in an official filing to the US market after its publication. It told the Guardian that it uses sources woody biomass only from “well-managed, sustainable forests” and not from “designated areas of old growth”. These areas amount to less than half of all the old-growth forest areas in British Columbia.
