REG - Drax Group Plc - Strategic partnership for GW-scale data centre

What happened

Drax signed an agreement with Brookfield and Radiant to develop an AI data centre on the Drax Power Station estate, targeting over 1GW, with Brookfield estimating total potential investment including chips could exceed £20 billion and an initial £2.5 billion for Phase 1.

Confirmed

Global impact / market context

The deal links Drax's land and power capacity to a large data centre project, which could turn its estate into long-term infrastructure hosting. Brookfield's estimated £20 billion potential spending signals significant capital flowing into UK AI infrastructure, with Phase 1 starting in Q1 2028.

Analyst inference

Companies supplying chips, construction and power equipment could see new orders tied to this project. Drax's existing 4GW grid access and 2.6GW generation become more valuable if data centre demand grows, shifting investor attention toward power-linked infrastructure assets.

Analyst inference

What to watch

1. Phase 1 targets up to 100MW and is intended to be operational from Q1 2028, so progress on construction and power connections is a concrete milestone to track. Confirmed
2. Phase 2 proposes ramping up an additional 500MW of capacity between 2028 and 2031, while Phase 3 proposes further development after 2031, both subject to the partners' ambitions. Proposed
3. Watch whether final investment decisions and spending commitments materialise, since Brookfield's figures are estimates and actual capital deployed could differ materially. Analyst inference

Evidence

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