Drax exploring options to power data centres as AI set to drastically increase power demand
North Yorkshire power station operator Drax has announced that it is exploring opportunities to provide power to UK data centres, as demand booms due to the adoption of AI.
The company said it had been engaging with data centre providers in relation to potentially co-locating the centres with its biomass energy generation.
The announcement comes after a report from Goldman Sachs into the costs of AI on energy consumption estimated that data centre power demand will grow 160 per cent by 2030.
A statement from Drax said: “The growing demand for 24/7 power to meet the needs of data centres represents a potential opportunity for generators like Drax.
“Drax has received positive engagement with data centre providers in relation to the potential to co-locate a data centre with biomass generation and Drax continues to explore such opportunities.”
In September, Microsoft also announced that it had struck a deal which will eventually see Pennsylvania's Three Mile Island nuclear plant brought back into use to supply power to its data centres to support AI adoption.
Drax’s announcement comes as part of a trading update for the firm, in which it also said that it expects full year adjusted earnings to fall around the top end of estimates from analysts.
The company also announced that in September, it had completed the sale of the majority of its Opus Energy SME customer meter points business. It added that an employee consultation process had been completed, resulting in a reduction in headcount. Drax also said that it is progressing with an £80m investment to refurbish and upgrade two of its units at its pumped-storage hydroelectric Cruachan Power Station.
The firm added that its Flexible Generation and Pellet Production businesses are making “good progress” towards the company’s target to deliver post 2027 recurring earnings before interest, taxes, depreciation, and amortisation of over £500m.
Drax is developing a method of energy production known as bioenergy with carbon capture and storage (BECCS) at its North Yorkshire site. This involves the burning of wood pellets to produce energy.
The company is currently awaiting a decision from the UK Government on whether it will continue to receive subsidies for the development of the technology after 2027.
Though supporters claim that bioenergy is carbon neutral, as the trees used to produce the wood pellets sequester CO2 during growth, its green credentials have been questioned by environmental groups.