Drax datacentre plan reshapes North Yorkshire energy future

Published: 12 December 2025. The English Chronicle Desk. The English Chronicle Online.

Drax has begun shaping a new chapter in its long industrial story as it moves to convert part of its North Yorkshire site into a modern datacentre by 2027. The plan signals a decisive shift for the energy company as rising demand for artificial intelligence creates pressure for greater computing capacity across the UK. The firm confirmed it has applied for planning permission to build a one hundred megawatt facility at its site near Selby, hoping to repurpose legacy assets created during its coal era in a way that supports the country’s digital expansion.

The proposed centre will take advantage of land, cooling networks and transformers that were previously tied to coal generation before the site moved to burning imported wood pellets. The first stage of the development will rely on electricity supplied directly from the UK grid, but Drax has suggested that future operations may be able to draw power from the plant itself. This approach would allow the company to maintain a steady demand for its own output at a moment when government support for its electricity generation faces renewed scrutiny.

The shift towards digital infrastructure arrives soon after a government announcement that subsidies for energy generation will be reduced from 2026 onwards. This change has prompted Drax to seek alternative ways to stabilise revenue over the long term. Its most recent trading update pointed to earnings at the top end of expectations, supported heavily by subsidies worth more than two million pounds per day. These payments have been central to the ongoing operation of biomass units that the company claims offer renewable power, despite persistent criticism from environmental groups and regulators.

The government has argued that previous subsidy arrangements did not offer value for money to households and allowed Drax to achieve what were described as unacceptably high profits. As part of the updated framework, the company now faces the requirement to use woody biomass from fully sustainable sources. This requirement raises the threshold from seventy percent to one hundred percent, creating a significant shift in regulatory expectations. The measure aligns with efforts to reduce reliance on material that may originate from vulnerable forest areas far beyond the UK.

The questions surrounding Drax’s biomass supply have continued to gather force in recent months following several detailed investigations into the sourcing of its wood pellets. Forestry specialists working with an independent review outlined evidence that the company may have burned trees up to two hundred and fifty years old taken from some of Canada’s oldest forests. These claims appeared in a report that renewed pressure on the company’s long-standing sustainability narrative. The findings built on earlier work reported by the BBC in 2022, which described similar concerns about old growth trees being included in supply chains that Drax had maintained were sustainable.

The matter has also drawn the attention of regulators. The Financial Conduct Authority opened an investigation earlier this year into what it described as historical statements made by Drax concerning its sourcing practices. The inquiry seeks to determine whether the company followed disclosure rules and maintained transparency when communicating with investors and the public. The outcome of the investigation is still pending, and there is significant interest in how the regulator’s conclusions might influence future policy around energy generation and corporate reporting.

Another major contribution to the debate came from Stand.earth, a Canadian environmental organisation that released a report suggesting Britain’s largest power station likely continued to source material from ecologically valuable forests as recently as this summer. The report argued that the company pursued further subsidies even as these sourcing issues persisted, raising additional questions about the alignment between its public commitments and its procurement decisions. These concerns have resonated widely, particularly in regions of Canada where communities and conservationists have long advocated for stronger protection of ancient woodland.

Drax rejected the claims in a formal filing to the United States market after the report became public. The company insisted that it draws biomass only from responsibly managed and sustainable forests and that it does not use material from designated old growth areas. It pointed out that such designated regions make up less than half of the total old growth forest coverage in British Columbia, an assertion that has done little to ease debate among environmental groups pressing for clearer definitions and stronger oversight. The tensions highlight the complexities that surround global biomass supply chains, where certification systems and ecological thresholds can differ significantly by region.

The company’s new datacentre plan has emerged against this backdrop of environmental scrutiny and evolving energy policy. The shift towards digital infrastructure presents an opportunity for Drax to diversify while potentially reducing dependence on controversial biomass operations. The rise of artificial intelligence has created an urgent need for large-scale computing facilities, and the UK has been seeking locations capable of supporting the enormous power and cooling requirements demanded by advanced data processing technologies. With its extensive site and existing infrastructure, Drax may be positioned to serve this growing market in a way that aligns with national aspirations for technological leadership.

Communities in North Yorkshire may view the new project as a way to sustain economic activity at a site that has undergone repeated transformations over recent decades. The move away from coal generation marked a major industrial change, and the renewed push towards a digital future could help the region remain central to the country’s evolving energy and technology landscape. Supporters believe such a development could create skilled jobs while ensuring that the site remains productive long after conventional energy production becomes less viable. Critics, however, have raised concerns that datacentres can place pressure on local electricity networks and water systems. They also question whether the shift contributes meaningfully to long-term sustainability goals.

As the company advances with its proposed datacentre, its ability to balance these competing interests will shape both public perception and policy engagement. The decision to repurpose parts of a major power station for digital use reflects broader global trends, as many countries explore ways to modernise former industrial sites. Such adaptations often require careful planning to ensure that technological expansion does not conflict with environmental responsibilities or local resource needs. For Drax, the path forward is likely to involve continued negotiation with regulators as well as transparent communication with the communities surrounding its operations.

The next stage for the project depends on planning approval, detailed operational design and long-term integration with the national grid. If the facility moves ahead as proposed, it could become a notable example of how legacy energy infrastructure can evolve to serve rapidly expanding digital demands. The company hopes that a fully operational datacentre will help stabilise long-term revenue, provide resilience amid policy changes and demonstrate that large industrial sites can adapt to new economic climates. Whether the development will alter the ongoing debate around Drax’s environmental impact remains unclear, but the project marks a significant turn in its strategy as the UK continues its transition to a more diverse and technologically driven energy system.