Drax plans on converting coal-era power stations into data centres by 2027

Drax Group announced on Thursday that it could convert a part of its power plant in Yorkshire, Northern England, into an data centre by 2027. The land, cooling systems, and transformers were previously used for coal generation.

Europe's old coal- and gas-fired plants are in need of a new lease on life. Tech giants like Microsoft and Amazon want to convert them into data centers, using the existing power and water supply, to meet the rise in AI-driven demand for energy.

Drax is preparing an application for a 100-megawatt potential data centre on the site, with ambitions of expanding capacity beyond 1 gigawatt by 2031. It wants to capitalize on a soaring demand for power in Britain driven by artificial intelligent.

Analysts at JPMorgan said that "while nothing has been decided, we believe this to be a more optimistic timeframe than investors would expect."

Drax said its November contract-for-difference agreement with the British government included an option for it to request up to 500 megawatts to ?power a data centre between 2027 and 2031, pending government approval.

Profits are seen at the top end of market view

Shares of the power producer rose by?more? than 2% as it forecasted a core profit in 2025 that was at or near the top of market expectations, based on its growth in flexible generation, biomass and pellet production units.

Drax aims to generate 3 billion pounds between 2025-2031 in free cash flow to fund shareholder returns of more than 1 billion pounds and growth investments up to 2 billions pounds.

The company also announced that it would be closing the?Williams Lake Pellet Plant in Canada, and pausing its Longview Project. It said it did not plan to invest in any additional pellet production capacity within the next few months.

(source: Reuters)