Drax Shares Surge on Data Center Hopes
Drax Group Plc shares surged to their highest level in over three years as investors bet that UK utilities could become major beneficiaries of the country’s rapidly expanding data center industry.
The company’s stock rose as much as 8.5% after Germany’s RWE AG revealed a €225 million ($261 million) gain from selling a UK data center project, sparking optimism about the value of converting former power sites into hubs for energy-intensive digital infrastructure. The news reinforced investor confidence in Drax’s own plan to host a data hub at its flagship biomass power station in North Yorkshire.
Barclays analysts Dominic Nash and Peter Crampton said in a note that the market is “overlooking the upside potential in Drax,” estimating that its 250-acre site, which already has grid connections, could be worth as much as £500 million if developed for data hosting.
Data centers are among the fastest-growing sources of power demand globally, with the UK grid struggling to keep pace. These facilities now represent more than half of all new grid connection requests and could eventually consume electricity equal to roughly one-third of Britain’s current peak demand. Redeveloping existing industrial or power generation sites offers a practical way to bypass grid congestion, but such properties are increasingly valuable and scarce.
RWE’s deal reportedly valued the project at about €1 million per megawatt of grid capacity. Chief Financial Officer Michael Müller said the company is evaluating “around 10 projects” of similar size across Europe and confirmed that valuation levels of “about a million euros per megawatt” remain consistent across markets.
For Drax, the data center project could also extend the utility of its biomass plant, which will operate less frequently under a new UK government subsidy agreement. Earlier this year, Drax said it aims to build a 100-megawatt data center at its site by 2030, a move that could diversify revenue as demand for digital power surges.
By late afternoon trading in London, Drax shares were up 6% at 746.5 pence, reflecting growing investor enthusiasm for utilities positioned to power the AI and cloud computing boom.
Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you'll always know why the market is moving before everyone else.
You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions - and we'll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.
Content Original Link:
" target="_blank">
