Drax inks deal with Brookfield for potential £20bn AI data centre project

What happened

Drax and Brookfield agreed to develop over one gigawatt of data centre capacity on the Drax Power Station estate, with an initial phase of up to 100 megawatts targeted to be operational from the first quarter of 2028, subject to planning, regulatory approvals and securing a tenant.

Confirmed

Global impact / market context

The project could draw about £2.5bn of investment into the first phase alone, giving Drax a new use for its land and power connections while tying its fortunes more closely to demand for AI computing, which needs large amounts of electricity.

Analyst inference

As of 1030 GMT, Drax shares were up 8.59% at 878.50p, according to the article. The plan still depends on planning and regulatory approvals and on securing a tenant before the first phase can proceed.

Confirmed

What to watch

1. A planning application for the first phase was being prepared, with a public consultation expected to begin later in November, so approval progress is a key hurdle before construction can start. Confirmed
2. The partners aim to add a further 500 megawatts of capacity between 2028 and 2031 and to explore more expansion after 2031, which would require new agreements and approvals. Proposed
3. Future phases could use a behind-the-meter model, meaning electricity supplied directly from the power station under long-term power purchase agreements, which would affect Drax's revenue and how its power is sold. Analyst inference

Evidence

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