Drax Group plc (LSE:DRX) has signed an agreement to develop a strategic partnership with Brookfield and its UK-based AI infrastructure platform Radiant to establish a large-scale artificial intelligence data centre at Drax Power Station in northern England.
The proposed development could eventually exceed 1 gigawatt (GW) of computing capacity, with Brookfield estimating potential investment of more than £20 billion, including semiconductor chips, if the project is developed in full.
An initial investment of approximately £2.5 billion is envisaged for the first phase, which targets up to 100 megawatts (MW) of capacity and commercial operations beginning in the first quarter of 2028.
The agreement brings together Drax’s existing electricity generation and grid infrastructure with Radiant’s data centre development capabilities and investment resources from a Brookfield-Qai joint venture established in 2025.
Three-Phase Development Targets More Than 1GW of Capacity
The partners intend to develop the data centre in three stages, beginning with a facility capable of delivering up to 100MW of computing capacity.
The first phase is planned for the period between 2026 and 2028, with electricity supplied directly from the national grid through existing infrastructure at Drax Power Station.
A second phase, targeted between 2028 and 2031, could add approximately 500MW of capacity using electricity generated at the power station.
Further expansion is envisaged after 2031, potentially increasing the overall development beyond 1GW.
The later phases would use a behind-the-meter electricity supply arrangement, allowing the data centre to receive power directly from Drax’s generation facilities.
However, the expansion plans remain ambitions rather than committed developments and will depend on regulatory approvals, commercial agreements and investment decisions.
Initial £2.5 Billion Phase Targets Operations in Early 2028
Phase 1 is expected to be developed on land within the existing Drax Power Station estate, using established infrastructure to import electricity from the grid.
Radiant will lead the design, customer engagement and commercial development of the facility, including securing commitments from prospective anchor customers.
Drax will be responsible for land arrangements, electricity integration and planning activities.
The partners are preparing a planning application, with public consultation expected to begin in November 2026.
Construction will depend on obtaining the necessary planning, regulatory and network approvals, securing an acceptable tenant, completing commercial agreements and receiving final investment approval from the participating companies.
The partners also intend to establish a voluntary community benefits fund in consultation with communities surrounding the power station.
This would be separate from existing Drax community initiatives and any obligations imposed through the planning process.
Existing Power Infrastructure Supports Expansion Plans
The proposed data centre would use infrastructure already available at Drax Power Station, including approximately 4GW of grid access and 2.6GW of active dispatchable electricity generation capacity.
The power station occupies more than 1,000 acres and is located near one of the UK’s largest electricity substations.
Its proximity to national fibre networks and existing cooling infrastructure also forms part of the rationale for locating the development at the site.
Drax said these characteristics could support the development of a major AI computing facility while maintaining the power station’s existing role in the UK electricity system.
The company expects the proposed development to support the long-term use of the site and help preserve employment associated with its operations.
Second Phase Could Use 500MW of Drax Generation Capacity
The second phase envisages the development of approximately 500MW of additional data centre capacity between 2028 and 2031.
Unlike the initial phase, this expansion would be supplied through a behind-the-meter arrangement using electricity generated directly at Drax Power Station.
The proposed structure would involve a long-term power purchase agreement, subject to the necessary approvals.
In November 2025, Drax entered into a Contract for Difference agreement with the UK Government covering approximately 6 terawatt-hours of annual biomass electricity generation between April 2027 and March 2031.
This represents approximately 30% of the annual baseload output available from the station’s 2.6GW of active generation capacity.
The agreement includes a mechanism allowing Drax to request permission to allocate up to 500MW of generation capacity to a data centre during that period.
Any such arrangement would require agreement from the UK Government and the Low Carbon Contracts Company.
The approval process would consider factors including consumer value for money, energy security and sustainability.
Drax confirmed that the power station’s existing responsibilities for electricity security of supply, dispatchable generation and system services would remain unchanged.
Further Data Centre Expansion Considered Beyond 2031
The third phase would involve evaluating additional computing capacity after 2031, using a similar direct electricity supply arrangement to the second phase.
The partners believe the combined developments could establish one of the UK’s largest AI data centre facilities if all stages proceed.
Brookfield’s estimate of potential investment exceeding £20 billion includes the cost of semiconductor chips and other computing equipment, rather than solely the construction of physical infrastructure.
The scale and timing of expenditure will depend on the final design, customer requirements, commercial arrangements and progression of the individual development phases.
No final investment decision has yet been announced for the project.
Partnership Brings Together Energy and AI Infrastructure Expertise
The agreement combines Drax’s electricity generation assets and site infrastructure with Radiant’s experience in developing and operating AI computing facilities.
Brookfield and Qatar-based technology company Qai will provide investment and operating capabilities through their existing AI infrastructure joint venture.
Radiant, which is headquartered in the UK, specialises in developing computing infrastructure for hyperscalers, enterprises, telecommunications companies and sovereign institutions.
Drax Group Chief Executive Officer Will Gardiner said the partnership could support the long-term future of the power station while attracting investment to northern England.
“If constructed in full, this project could become one of the largest data centres in the UK, with the potential to attract billions in inward investment,” Gardiner said.
He added that the existing power station infrastructure offered an opportunity to provide reliable electricity supplies to data centre operators without requiring an entirely new generation site.
Brookfield’s Head of AI Infrastructure, Sikander Rashid, said the project would form part of the group’s wider AI infrastructure investment strategy.
Radiant Chief Executive Officer Mahdi Yahya also highlighted the potential to provide UK-based computing capacity for researchers, businesses and other users of artificial intelligence.
Outlook
Drax’s proposed partnership with Brookfield and Radiant represents a potential diversification of the power station estate into large-scale AI computing infrastructure.
The immediate priorities are progressing the Phase 1 planning application, consulting local communities, securing an anchor customer and obtaining the necessary regulatory and network approvals.
The partners are targeting commercial operations for the initial 100MW facility from the first quarter of 2028, although construction and investment remain conditional on several outstanding requirements.
Subsequent phases could expand capacity by more than 500MW and ultimately take the development beyond 1GW, subject to further commercial, regulatory and investment decisions.
The project could provide an additional long-term use for Drax’s existing electricity infrastructure, while the company’s current generation and energy security commitments are expected to continue.
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