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The UK government has rejected York and North Yorkshire’s bid for an AI Growth Zone centred on a proposed data centre at Drax Power Station near Selby. Drax says the rejection does not end its separate project and that it plans to submit a planning application for a first 100 MW phase.
What was rejected
York and North Yorkshire Combined Authority confirmed that its AI Growth Zone proposal was unsuccessful. North Yorkshire Council, the University of York and Drax helped develop the bid, which focused on land at Drax Power Station near Selby, North Yorkshire. The Yorkshire Post reported the confirmation on 9 October 2026, after Land and Climate Review reported the rejection on 7 October.
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The government has not published an individual scorecard, decision memo or decisive reason for rejecting this bid. A government spokesperson said AI Growth Zone proposals must meet published criteria, including “credible plans for energy delivery, environmental considerations, and local economic benefit”, and that “all bids are assessed on their individual merits.”
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Drax says it is continuing with the data-centre plan outside the rejected designation. The company told the Yorkshire Post that the AI Growth Zone was not essential to the project and that it intends to submit a first-phase planning application “in the coming months.”
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Drax describes that initial phase as a 100 MW “front-of-metre” data centre. It has also discussed a longer-term hyperscale development of up to 1.2 GW. Drax said successful progress on the first phase could allow a facility to come online before the end of this decade. These are the company’s proposed scale and timetable, not planning approval, a construction decision or a guaranteed operating date.
What the planning record shows
A planning-register entry records an environmental-impact screening proposal submitted on 9 December 2025. It describes a Use Class B8 data centre with ancillary offices, external plant, access roads, parking, cabling, landscaping and associated works. Environmental-impact screening determines whether further assessment is required; it is not permission to build or operate the facility.
| Item | Current position |
|---|---|
| AI Growth Zone bid | Rejected by the UK government in October 2026 |
| First proposed development | 100 MW, according to Drax |
| Longer-term ambition | Up to 1.2 GW, as reported by Land and Climate Review |
| Planning status | Environmental-impact screening record; no construction approval stated |
| Drax’s next stated step | Submit a first-phase planning application in the coming months |
Why the Growth Zone designation mattered
The AI Growth Zone programme is designed to make it easier to deliver power and planning support for AI-focused data centres. Government policy describes possible mechanisms to reallocate or reserve grid capacity, allow investors to build high-voltage connections themselves, reform planning processes and provide a dedicated delivery unit.
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Published government estimates for the programme say reforms could cut time to power by up to five years, save a 500 MW data centre as much as £80 million a year in electricity costs, unlock up to £100 billion in additional investment and create more than 10,000 jobs. Those figures are national programme estimates from 2025, not results achieved by the rejected North Yorkshire proposal.
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The bid’s proponents separately projected that the region could capture 15% of UK AI economic growth by 2035, protect 3,500 jobs in the North of England and unlock about £85 billion across Yorkshire and the Humber. The Yorkshire Post presented these as proponents’ forecasts, not measured outcomes.
Could Drax power the data centre directly with biomass?
Not automatically. A UK Parliament answer dated 21 January 2026 said Drax would need permission to supply a data centre directly from its biomass generating units during the 2027–31 Low-Carbon Dispatchable Contract for Difference period. Without that permission, a data centre at the site could not draw electricity directly from those units.
The same answer said Drax must meet enhanced sustainability requirements, including sourcing 100% of its biomass from sustainable sources. The answer does not guarantee that the proposed data centre will use biomass electricity, nor does it establish that direct supply permission will be granted.
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Environmental and political dispute around the proposal
Land and Climate Review characterised the plan as connected to Drax’s ambition to extend the life and profitability of its wood-burning power plant. Its investigation also reported criticism of Drax’s biomass accounting and said a University of York letter stated that “Drax is no longer under consideration as a site for the Growth Zone.” Those are reported positions and claims from that investigation, not a published government finding that resolved the dispute.
Mayor David Skaith was quoted by Land and Climate Review describing the vision as “a pathway to the world’s first carbon-negative data centre”, based on bioenergy with carbon capture and storage (BECCS). Whether a facility could make that claim would depend on its final design, emissions accounting, biomass sourcing and carbon-capture performance; none of those outcomes has been established by the rejection announcement.
What happens next
- Drax’s planning application: The company says it will submit a first-phase application for the proposed 100 MW facility in the coming months.
- Local planning decisions: Authorities will have to assess the application and any required environmental information. The existing screening record is not an approval.
- Power and connection approvals: The developers will need a deliverable electricity arrangement. Direct supply from Drax’s biomass units during 2027–31 would require the permission described in the parliamentary answer.
- Project economics and construction: Funding, equipment, grid work and other delivery decisions remain to be demonstrated before the stated “before the end of this decade” target can be treated as a firm schedule.
No formal appeal outcome, replacement Growth Zone designation or detailed government assessment for this specific bid has been published. The rejection removes the proposed programme designation and its potential policy support, but it does not, by itself, cancel Drax’s separately pursued data-centre proposal.
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