Drax Group has signed an agreement with Brookfield and Radiant, Brookfield’s UK-headquartered AI infrastructure platform, to develop an AI data centre on the Drax Power Station estate in the north of England, Drax said in a stock exchange announcement on 3 November. The partners target more than 1GW of data-centre capacity in three phases. Brookfield estimates that total potential investment, including semiconductor chips, could exceed £20 billion, with an initial £2.5 billion as part of Phase 1.
Update, 3 Nov: the market reaction. Drax shares were at 873.00p at 08:20 GMT, up 64.00p or 7.91% on the day, according to delayed London Stock Exchange data shown by FT Markets. CNBC, in a report published at 08:28 GMT, said London-listed Drax shares were up 8.2% in early morning trading. The $27 billion in CNBC’s headline is its dollar conversion of Brookfield’s estimate that total investment could exceed £20 billion (CNBC gives $26.8 billion), not a new estimate.
The second phase is where the power station comes in. Drax’s Contract for Difference with the UK government includes a mechanism for Drax to request up to 500MW of capacity being used to power a data centre between April 2027 and March 2031, subject to agreement with the government and the Low Carbon Contracts Company. That 500MW is 19% of the station’s 2.6GW of active generation, by our arithmetic.
Phase 1 targets up to 100MW, drawing power directly from the grid, with commercial operations targeted from early 2028. It is subject to planning approvals, regulatory and network approvals, securing an acceptable tenant and a final investment decision by each party. No tenant is named in the announcement.
The key insight: By our arithmetic, the 500MW that Drax’s CfD lets it request for a data centre is 19% of Drax Power Station’s 2.6GW of active generation. Phase 1 is planned on grid power; Phase 2 is planned behind the meter, on the station’s own generation, subject to government agreement.
Drax describes the estate as over 1,000 acres, next to one of the country’s largest substations, with c.4GW of grid access and 2.6GW of active dispatchable generation and cooling systems. The site is close to the UK fibre network, the announcement says.
Phase 1, set for 2026 to 2028, targets “up to 100MW of compute capacity, making it one of the largest current data centres in the UK”. Drax says it is to use existing infrastructure to import power directly from the grid, managed by Drax. A planning application is being prepared, and a public consultation is expected to start in November 2026.
Phase 2, from 2028 to 2031, is described as “an ambition to develop options for 500MW of data centre capacity”. It is expected to use the station’s existing generation to supply power “behind-the-meter”, around the clock, directly to a data centre under a long-term PPA agreement, subject to consents. Phase 3, after 2031, is an ambition for more capacity using the same behind-the-meter approach.
Phases 1 and 2 add up to 600MW, by our arithmetic, or 60% of the 1GW aggregate target. Drax says that “In aggregate Phases 1, 2 and 3 have the potential to deliver GW-scale data centre capability at Drax Power Station”.
Drax Power Station’s grid access and active generation against the data-centre phases, in MW, from Drax’s announcement of 3 November 2026. Phase 2’s 500MW is 19% of the 2,600MW of active generation, and Phases 1 and 2 add up to 600MW, by our arithmetic. Phase 2 is an ambition and needs government agreement under Drax’s CfD.
Who Does What
Under the announcement, Radiant is to lead on design, customer engagement and commercialisation, and to seek anchor customer commitments before construction starts. Drax says it is to lead on land, power integration and planning. Investment capital and operating capabilities come through a Brookfield-Qai AI infrastructure joint venture announced in 2025; Qai is a technology company headquartered in Qatar.
Drax chief executive Will Gardiner said the project “can help secure the long-term future of the site and protect hundreds of jobs”. He added: “Drax Power Station is one of the few UK sites that can provide large-scale reliable power directly to data centre customers by utilising existing and underutilised generation capacity”.
Brookfield’s head of AI infrastructure, Sikander Rashid, called it “a major opportunity for our AI infrastructure strategy”. Radiant chief executive Mahdi Yahya said it “will give British researchers, startups and enterprises access to frontier compute at home”.
The Subsidy Contract Behind Phase 2
In November 2025, Drax signed a CfD with the UK government to provide c.6TWh of biomass generation a year between April 2027 and March 2031. Drax says that equals c.30% of total annual baseload output from its 2.6GW of active generation.
The 500MW clause sits inside that contract. The decision on any request takes into account “value for money for consumers, energy security, and sustainability”, among other factors, Drax says. It adds that the station’s role in supporting UK security of supply “will remain unchanged”.
Scale check, by our arithmetic: 500MW drawn every hour of a year would use 4.38TWh, about 73% of the CfD’s c.6TWh annual volume. That is an upper bound; the announcement gives no expected load factor for the data centre.
An evergreen Business Engineer explainer on grid cost allocation: who pays when new power lines and capacity are built for large loads such as data centres. It explains the general idea only and does not discuss Drax, Brookfield or Radiant.
As we read the announcement, the first two phases rest on different power sources. Phase 1 imports up to 100MW from the grid. Phase 2 is planned to take power from Drax’s own generation under a long-term PPA, and that use runs through a clause in Drax’s CfD with the government.
As we read it, the gate for Phase 1 is a customer. Radiant is to seek anchor customer commitments before construction starts, and Phase 1 also needs an acceptable tenant, approvals and a final investment decision by each party.
Will Gardiner, Drax Group CEO
“If constructed in full, this project could become one of the largest data centres in the UK”
Three Implications
FOR DRAX Gardiner said the project can help secure the long-term future of the site and protect hundreds of jobs. Its CfD runs from April 2027 to March 2031, Drax says.
FOR THE GRID Phase 1 draws up to 100MW from the grid; Phase 2 is planned behind the meter. The site has c.4GW of grid access and 2.6GW of active generation, Drax says.
FOR CONSUMERS Any 500MW request is weighed on value for money for consumers, energy security and sustainability, among other factors, Drax says.
The framework states: “The structural bottleneck isn’t computing, it’s electrons.”
As we read it, the Drax announcement sells a site on that point: the partners cite the station’s existing grid access and generation, not new supply. The framework was published in December 2025 and does not discuss Drax.
What Is Not Established
The announcement names no tenant, gives no PPA price and does not split the £20 billion between chips, buildings and power. The £20 billion and £2.5 billion figures are Brookfield’s estimates. Phases 2 and 3 are described as ambitions, and the 500MW use needs agreement from the government and the Low Carbon Contracts Company. We read Drax’s announcement; we did not read separate Brookfield or Radiant releases.
This Week In The AI Supercycle
Anthropic’s Reality Check, The Capital Squeeze, & The New World Order
This week’s issue: for two years the AI build-out was priced as a growthstory. This week it started being priced as a credit story.
Drax, Brookfield and Radiant target a data centre of more than 1GW at Drax Power Station, starting with up to 100MW on grid power from early 2028. The larger second phase depends on a clause in Drax’s CfD that lets it request up to 500MW, 19% of the station’s active generation by our arithmetic, for a data centre, subject to government approval.
A note on sourcing. All facts, figures and quotes are from Drax Group plc’s RNS announcement of 3 November 2026, read in full on Investegate. The £20 billion and £2.5 billion figures are Brookfield’s estimates as stated by Drax. Percentages and the 4.38TWh upper bound are our arithmetic. We did not contact Drax, Brookfield, Radiant or Qai.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
