Britain's AI infrastructure boom could soon have an unlikely new home: Drax Power Station, where the operator of the country's largest biomass power plant has unveiled plans for a £20 billion datacenter development capable of consuming more than a gigawatt of power.

Drax announced on Tuesday that it has teamed up with investment giant Brookfield and its UK-based AI infrastructure business Radiant to build the facility at its North Yorkshire site. The money would come through a joint venture between Brookfield and Qatar's Qai, although the £20 billion headline figure is more ambition than actual money on the table at this stage.

The companies plan to start relatively small, at least by the standards of the AI industry's apparently bottomless appetite for electricity. The first phase would deliver up to 100MW of capacity by early 2028, backed by a proposed £2.5 billion investment. A second phase could add another 500MW between 2028 and 2031, with further expansion taking the site beyond 1GW after that.

However, a few hurdles remain between today's announcement and a functioning AI megafactory. According to Drax's regulatory filing, the first phase still requires planning permission, regulatory and network approvals, commercial agreements, and final investment decisions.

It also needs a tenant, which is a fairly important detail when you're proposing to spend billions on somewhere to house other people's computers.

Drax reckons its existing infrastructure gives it an advantage over developers struggling to secure electricity connections. The 1,000-acre site already has access to 4GW of grid capacity, 2.6GW of active generation and cooling infrastructure, along with proximity to the UK's fiber network.

The UK government estimated last week that all of Britain's existing data centers use around 2GW of electricity. Drax's proposed development alone could eventually need more than 1GW, although how much power it actually consumes will depend on how fully it's used.

The first phase would draw electricity from the grid, but Drax wants to supply up to 500MW directly from its existing generating capacity under a long-term power purchase agreement, potentially allowing AI servers to run on electricity produced by burning imported wood pellets.

That brings another complication. Drax signed a government-backed Contract for Difference agreement last year covering biomass generation between April 2027 and March 2031. The agreement allows the company to request permission to redirect up to 500MW of capacity towards a datacenter, but ministers and the Low Carbon Contracts Company would have to agree, taking into account consumer value, energy security, and sustainability.

The announcement also arrives as enthusiasm for enormous AI server farms is proving rather less universal outside government and industry circles. Opposition to data center developments has been growing on both sides of the Atlantic, with communities raising concerns about electricity bills, water consumption, and the impact of industrial-scale facilities on their surroundings.

A recent investigation found that businesses accounted for 84 percent of the stakeholders UK ministers met to discuss datacenters between July 2024 and June 2026, while environmental groups secured precisely zero meetings.

Drax and its partners are promising a community benefits fund and say public consultation will begin this month. Whether that will reassure residents concerned about another enormous consumer of electricity is a moot point.

Drax CEO Will Gardiner said the project could "help secure the long-term future of the site and protect hundreds of jobs," while supporting Britain's ambitions to become a major player in AI.

The government, unsurprisingly, is enthusiastic. Chief Secretary to the Treasury Emma Reynolds welcomed the proposed investment as an opportunity to create jobs and support Britain's reindustrialization.

“Investments like this will help pave the way to a new age of British reindustrialization, creating good jobs in Yorkshire and delivering growth right across the country,” she said.

Ministers may be enthusiastic, but Drax still has to find a customer, secure planning permission, and convince regulators before anyone starts plugging in servers. ®