Based on reporting by Ian Lyall (themarketreporter.co.uk).
Power generator Drax and investment group Brookfield have agreed to develop a massive artificial intelligence data center at Drax's power station in North Yorkshire, England. Brookfield estimates total investment in the complex, including computer chips, could exceed £20 billion, with £2.5 billion earmarked for the first phase of construction. The joint effort targets total data center capacity exceeding 1 gigawatt, which would make the facility one of the largest in the United Kingdom.
What the multi-phase project involves
The proposed development is designed to unfold in distinct stages at the North Yorkshire site, leveraging existing energy infrastructure to meet the intense electricity demands of artificial intelligence hardware.
Phase 1: Aims to deliver up to 100 megawatts of computing capacity by early 2028, drawing electricity directly from the UK national grid.
Phase 2: Planned to add an additional 500 megawatts between 2028 and 2031, drawing power directly from Drax's own generating units rather than the national grid.
Total scale: Targets total site capacity above 1 gigawatt.
Key players: Radiant, Brookfield's UK-based AI infrastructure business, will manage design and commercialization, with funding coming from a joint venture between Brookfield and Qatari technology company Qai.
The Drax location currently possesses approximately 4 gigawatts of grid access and 2.6 gigawatts of generating capacity. Drax stated that this existing infrastructure makes the site one of the few locations in the United Kingdom capable of supplying substantial amounts of reliable electricity directly to energy-intensive computing facilities.
Regulatory hurdles and government biomass contracts
Before construction on the initial phase can begin, the project must secure planning, regulatory, and network approvals. The development team also requires an anchor tenant and final investment decisions from both corporate partners. A planning application is currently being prepared, and a formal public consultation is scheduled to begin this month.
The execution of the second phase hinges on approval from government officials under a specific mechanism within Drax's biomass subsidy contract. This provision allows up to 500 megawatts of power generation to be diverted to a dedicated data center, provided ministers grant permission. In reviewing any proposed diversion, government officials are expected to evaluate value for money for energy consumers, broader national energy security, and environmental sustainability.
Drax Chief Executive Will Gardiner stated that the data center initiative could help secure the long-term future of the North Yorkshire power plant while protecting hundreds of local jobs. Gardiner also called on the government to translate its public statements supporting faster planning processes and grid connections into concrete regulatory delivery.
What the deal means for investors and the energy sector
For investors, energy producers, and technology companies, the partnership highlights how the surge in artificial intelligence workloads is reshaping corporate strategies around power consumption and infrastructure asset management.
As technology developers build larger computing clusters—a trend reflected in broader industry efforts to establish dedicated AI compute campuses—securing access to large volumes of electricity has become a primary bottleneck. By partnering directly with power generators, investment firms can bypass traditional grid constraints by placing data facilities adjacent to existing generation assets.
For energy sector operators and electricity consumers, direct co-location offers a model where large industrial energy users draw power off-grid, potentially reducing load pressure on national transmission networks. However, because Drax operates under government subsidy arrangements for its biomass generation, public oversight and regulatory decisions will dictate how much power can be allocated to private enterprise versus the public grid.
What to watch next
Several upcoming milestones will determine whether the ambitious project proceeds according to schedule:
Public consultation: The community feedback process begins this month in North Yorkshire.
Planning submission: Formal submission of the planning application will follow the public consultation process.
Tenant selection: The partners must secure a major anchor tenant to commit to the initial 100-megawatt phase.
Government decision: Energy regulators and government officials must review the contract mechanism governing the proposed 500-megawatt direct-wire biomass supply for the second phase.
Target launch: Early 2028 marks the projected start of operations for Phase 1.
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