Drax Explores Options to Sell Biomass Power to UK Data Center

(Bloomberg) -- Drax Group is exploring options to sell power to a data center provider in the UK, guaranteeing income for its biomass-fired plant.

Electricity use by data hubs in Britain will jump sixfold in the next 10 years as a boom in artificial intelligence requires increased computing heft, National Grid said earlier this year. Drax’s plan would co-locate a data center with biomass generation, avoiding reliance on a power grid already under strain.

“The growing demand for 24/7 power to meet the needs of data centers represents a potential opportunity for generators like Drax,” the Selby-based company said in a statement on Tuesday. “Drax has received positive engagement with data-center providers.”

The company also said it sees full-year earnings near the top end of analysts’ estimates, reflecting “continued strong performance across the business.”

Drax is looking at various options for locking in power sales, since the future of UK subsidies remains unclear. It’s awaiting a decision from the new government on a so-called bridging mechanism, which would see taxpayers support its biomass plant beyond 2027 when current subsidy agreements expire. 

The generator is a key cog in the UK’s electricity supply, accounting for 6% of the total. Biomass generation provides a reliable backup when calm or cloudy weather causes wind and solar production to halt.

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