Russ Mould, investment director at AJ Bell, said: “A key component of the artificial intelligence story is the associated energy demands and Drax clearly sees an opportunity to benefit.
“The company has unveiled proposals to repurpose existing infrastructure and grid links at its Yorkshire power station to make its own contribution to the growth of AI.
“Once fuelled by the coal which was central to the industrial revolution, upgraded infrastructure will be utilised to run a data centre as part of the latest phase of technological advancement.
“The plan is to have this up and running within the next two years.
“In the meantime, Drax sees earnings for the current year at the top end of expectations and remains on track to hit its medium-term targets.
“Healthy cash flow is expected to facilitate generous payouts to shareholders alongside investment for future growth.
“Drax has started to shrug off the hit to its share price back in August when news of an FCA probe into its financial reporting around sourcing of biomass pellets was announced.
“However, ongoing controversy about its biomass strategy, the subsidies it receives and the process of burning wood pellets to generate power continue to hang over the company.”
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