Drax and Brookfield sign 1 GW data centre framework at Drax Power Station

Drax signs a 1 GW framework with Brookfield and Radiant

Drax Group signed an agreement with Brookfield and Radiant on 3 November to develop a data centre at Drax Power Station in North Yorkshire. The partners target more than 1 GW of capacity, with a first phase of up to 100 MW expected to be operational from the first quarter of 2028.

Brookfield estimates total investment could exceed £20 billion, including chips and other computing equipment, with about £2.5 billion for the first phase. That leaves the first 100 MW at roughly a tenth of eventual capacity and an eighth of headline spend. No final investment decision has been announced. The first phase still needs planning, regulatory and network approvals plus customer commitments.

Investors liked the shape of it. Drax shares rose 8.59% to 878.50p by 1030 GMT on Tuesday.

Why power contracts are changing

The timing is not accidental. Hooking up 100 MW to the grid in Northern Virginia takes about seven years, according to the International Energy Agency.

Grid queues are costing operators deals. Microsoft pulled out as anchor customer for Nscale's data centre in Loughton, England, after the local utility said it could not deliver enough power until the early to mid-2030s. As of April this year, half of data center buildouts had been canceled or delayed, partly for lack of power. Forecasts keep climbing. A July 2026 report predicted data centers would use 20% of all U.S. power by 2035, an 83% increase over the same forecast seven months earlier.

OpenAI said US data center capacity is projected to exceed 100 GW by 2030. On 3 November it launched its non-binding Grid Protectors Program, aiming to cut demand from future campuses under grid strain and offering up to 1 GW of flexible demand response.

Behind the meter and on-site generation

Later phases of the Drax project envisage about 500 MW between 2028 and 2031, supplied behind the meter from Drax's generators under long-term power purchase agreements. That supply would need approval from the UK government and the Low Carbon Contracts Company. Drax calls the expansion plans ambitions rather than committed developments.

Policy is moving the same way. The British Data Centre Covenant, announced in the 28 October Budget by John Healey, offers critical data centres priority grid access. It also lets them build on-site generation while they wait for a connection. In return, developers must invest in local communities, create jobs and protect local water supplies.

Cost, carbon and the biomass link

At Drax the power question is entangled with subsidy. In November 2025 the company signed a Contract for Difference with the UK government covering about 6 TWh a year of biomass generation from April 2027 to March 2031. It includes a mechanism to allocate up to 500 MW to a data centre in that period. JPMorgan analysts said the partnership could raise expectations that the station keeps running after the scheme expires in March 2031. Brookfield's involvement adds credibility, Investing.com reported.

On-site generation carries its own costs. Converted jet engines, which some data centres now use, are less efficient and pollute more than turbines built for conventional gas plants, according to the New York Times. xAI has installed eight converted jet-engine turbines in Mississippi. Permits allow a 25% higher limit for volatile organic compounds, and the Southern Environmental Law Center has challenged the approval.

What happens next

A planning application for the first phase is being prepared, with public consultation expected to begin in November 2026. Commercial operations for the first 100 MW are targeted for early 2028, subject to approvals and securing a tenant.

The second phase of about 500 MW is envisaged for 2028 to 2031. A third would be evaluated after 2031.