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Drax Group announced plans to convert part of its Yorkshire power plant in Northern England into a data center by 2027. The project will repurpose land, cooling systems, and transformers previously used for coal production.

This shift is driven by increasing energy demands from the AI sector, attracting attention from major tech companies like Microsoft and Amazon Web Services (AWS), which are seeking to transform aging power plants into new data centers. Drax aims to establish a 100 megawatt data center initially, with plans to expand capacity to over 1 gigawatt post-2031 to meet rising electricity demand fueled by AI advancements.

The company is also preparing a construction application. Drax's stock rose over 2% following a profit forecast for 2025, expected to be near market highs. The company targets generating £3 billion in free cash flow between 2025 and 2031, with over £1 billion allocated for shareholder returns.