The UK government has rejected a bid by North Yorkshire Council, the University of York, and energy company Drax to utilize a bioenergy power plant near Selby, North Yorkshire, to power an AI data center.

The project was submitted through the UK’s AI Growth Zone scheme, which enables local authorities to apply for state funding and other benefits to aid the construction of large-scale AI data centers that support the country’s broader digital infrastructure ambitions.

Drax's proposal envisaged building a 1.2GW data center powered by the 2.58GW power plant, the UK's single largest energy generator. The applicants described the facility as the world's largest “carbon negative data center,” even though the power plant itself is one of the UK's largest emitters. According to data from energy think tank Ember, Drax emitted 14.1 million tonnes of CO2 equivalent in 2025.

The applicants claimed the data center would achieve carbon negativity through carbon capture and storage by installing massive chemical scrubbers in partnership with Mitsubishi Heavy Industries. It was claimed this would capture at least eight million tonnes of CO2 from the chimneys each year.

According to local reports by the York Press, the proposal was rejected because it failed to meet the criteria needed for selection, including “credible plans for energy delivery, environmental considerations, and local economic benefit”.

A Drax spokesperson told the York Press that while it was pleased to support York and North Yorkshire’s AI Growth Zone bid, it had “never relied” on its success.

The power producer has now pivoted to a smaller project, planning a 100MW data center that would draw power from the national grid rather than from the power plant.

In a statement, Drax said: “Drax Power Station is uniquely positioned to support data center developers through our site’s existing infrastructure, grid connections, and this is recognized in our new support agreement with the government.

“Drax plans to submit its first phase 100MW front-of-meter data center to the planning authorities in the coming months, and its successful progress could enable a data center to come online before the end of this decade.”

Rumblings that Drax was planning a data center first arose in November 2024. Following this, in February of last year, it was reported that it was in discussions with data center operators about a potential supply agreement, noting that it had received “positive engagement with data center providers regarding the potential to co-locate a data center with biomass generation.”

Since then, the company signed a ten-year corporate Power Purchase Agreement with Global Switch to support the firm's UK operations.