Drax and Brookfield plan gigawatt-scale AI data center at former UK coal plant

Drax Group, the operator of Britain's largest power station, agreed on Tuesday to turn part of its North Yorkshire site into a gigawatt-scale artificial intelligence data center, in partnership with Brookfield Asset Management and Brookfield's AI infrastructure platform, Radiant. The companies said in a joint announcement that total investment in the project could exceed £20 billion, or roughly $26.8 billion, if it is built out in full.

The deal pairs a biomass power plant built on the footprint of a former coal station with the capital and engineering of two of the world's largest alternative-asset managers, at a moment when AI developers are competing for scarce electricity and grid connections across Europe. Drax shares rose as much as 9 percent in London trading on the news.

The numbers behind the plan

The first phase, worth an initial £2.5 billion, targets up to 100 megawatts of data center capacity and aims to begin commercial operations in early 2028, subject to planning permission, grid approvals and a final investment decision. A second phase would add up to 500 megawatts between 2028 and 2031, with the partners describing an ambition to exceed 1 gigawatt of total capacity over the longer term.

Drax is contributing a roughly 1,000-acre estate, 2.6 gigawatts of dispatchable biomass generation and an existing 4-gigawatt grid connection, assets built up over decades as a coal and then biomass plant near Selby. No tenant has yet been named for the data center, and construction on the first phase cannot begin until one is secured, according to the companies.

Who is putting up the money

Radiant, which will lead design, customer engagement and day-to-day delivery of the project, was formed this year when Brookfield merged its AI cloud ambitions with the London cloud-computing startup Ori Industries; the combined business was valued at roughly $1.3 billion. Brookfield's capital is routed through a joint venture it formed in December with Qai, the Qatar Investment Authority's artificial-intelligence arm, which the two companies described at the time as a $20 billion strategic investment partnership aimed at AI infrastructure in Qatar and other international markets. The Drax project is among the first announced uses of that vehicle outside Qatar.

"Our capital and deep operating capabilities will help accelerate the construction of a critical piece of sovereign AI," Sikander Rashid, Brookfield's head of AI infrastructure, said in the announcement. Drax chief executive Will Gardiner said the site was "one of the few UK sites that can provide large-scale reliable power directly to data centre customers."

"This country has a unique opportunity to bring together AI leadership, energy infrastructure and industrial renewal."

That line, also from Gardiner, points to the political backdrop for the deal. The British government published a Data Centre Covenant on October 28, setting out conditions under which data centers can win "strategic" status, including faster planning decisions through a new Ministerial Control Centre and reserved or reallocated grid capacity. The policy paper estimates Britain will need 6 gigawatts of additional AI data center capacity by 2030. Drax and its partners said the Yorkshire project aligns with the covenant's aims, based on an initial assessment, though the government has not yet published the detailed criteria a site must meet to qualify.

Jobs, emissions and a subsidy clock

Drax and Brookfield said the partnership would protect "hundreds of jobs" at the power station and generate further direct and indirect employment across Yorkshire, alongside a voluntary community benefits fund separate from standard planning obligations. Local members of Parliament, including Keir Mather, who represents Selby and Kippax, welcomed the announcement, as did Treasury and science ministers who framed it as evidence of foreign investment in regional reindustrialisation.

The project also lands amid scrutiny of Drax's existing operations. An analysis published in July by the energy think tank Ember found Drax was Britain's single largest carbon emitter for an eleventh consecutive year in 2025, releasing 14.1 million tonnes of CO2-equivalent while collecting a record £999 million in government subsidies for burning imported wood pellets. Those subsidies are due to taper and end under the current contract in March 2031, a deadline that has fed speculation about what happens to the site afterward. Analysts at JPMorgan, in a note reported by Reuters, said the data center plan could support the case for keeping the plant operating past that point, given Brookfield's standing as a credible infrastructure partner.

What happens next

Drax said it expects to launch a public consultation on the first construction phase shortly, ahead of filing a formal planning application in the coming months. No contracts have been signed with a data center customer, and the companies' own materials describe the £20 billion figure as an estimate of total potential investment rather than capital that has been committed. Final decisions on each phase will depend on securing regulatory and network approvals from the government and National Energy System Operator, as well as on demand from AI and cloud computing firms for the kind of large, grid-connected sites that have become increasingly difficult to find in Britain and across Europe.

The announcement follows a string of similar tie-ups between asset managers and power generators seeking to capture AI-driven electricity demand, and adds Drax to a list of British sites, including a planned AI Growth Zone at Culham in Oxfordshire, that the government is promoting as it tries to keep computing capacity for advanced AI models onshore.

For Brookfield, the Drax deal is also a test of how quickly Radiant can move from a recently assembled platform into delivery of physical infrastructure. The firm has said it intends to use its Artificial Intelligence Infrastructure Fund, which carries an ambition to mobilize up to $100 billion globally, to back projects beyond Qatar, and the North Yorkshire site is among the largest it has put a figure on publicly so far. How much of that sum is ultimately spent at Drax will depend on whether the partners can line up a customer willing to commit to a decade-long lease on power-hungry computing capacity in rural Yorkshire.