Drax to open first data centre and scale back pellet production

DRAX, the UK’s largest renewable power station operator, plans to expand its Selby, North Yorkshire site with a 100 MW data centre.

The proposal forms part of a wider strategic shift, which also includes the development of a pipeline of battery energy storage system (BESS) projects and a reduction in pellet production following the closure of its Williams Lake operation in Canada.

Almost a fifth of the UK’s energy demand is supplied by biomass and Drax has recently secured a Contracts for Difference (CfD) agreement which will see the company deliver up to 6 TWh/y of biomass generation to the UK between 2027 and 2031.

In a recent trading update, Drax said it expects to generate £3 bn (US$4 bn) in free cash flow between now and 2031, with around two-thirds to be reinvested in renewable energy projects.

Will Gardiner, CEO of Drax, said: “By 2050, demand for power is expected to double, while secure gas generation reduces and intermittent renewable generation increases, meaning more dispatchable and reliable generation will be required to help keep the lights on when the wind isn’t blowing and the sun isn’t shining.”

Pellet production

Since the closing of Williams Lake, Drax said it does not expect to invest in pellet production in the “short or medium term”.

The company’s pellet operations have faced increased scrutiny this year, including an investigation by the Financial Conduct Authority (FCA) into the sustainability of its wood sourcing. Drax has reiterated its commitment to decarbonisation and said it continues to invest in carbon removals.

New projects

Drax said it is developing a BESS pipeline at “GW scale”, comprised of its own projects and third-party acquisitions. It recently acquired three BESS projects from renewable energy firm Apatura Energy, with a combined capacity of up to 260 MW.

Plans for the data centre have yet to be finalised but Drax said the facility will take advantage of the existing infrastructure at the power station, originally used to support coal generation, to enable direct power import from the grid.

Drax’s newly secured CfD agreement also gives the company the option to request up to 500 MW to power a data centre during the contract period.

In the longer term, the company expects to develop a data centre of up to 1 GW, powered entirely by renewable energy from Drax. The first phase of the data centre is expected to be operational by 2027.

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