Drax Explores Options to Sell Biomass Power to UK Data Center
(Bloomberg) — Drax Group Plc 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 Plc 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 Selby-based company said in a statement on Tuesday,
The growing demand for 24/7 power to meet the needs of data centers represents a potential opportunity for generators like Drax,
“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.
The shares surged as much as 7.6%, the most since July, and traded up 7.3% as of 8:43 a.m. in London.
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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Drax Explores Options to Sell Biomass Power to UK Data Center, source
