Drax, the owner, and operator of the UK’s largest Biomass facility in Selby, is discussing with data center operators about a potential energy supply agreement from its Biomass plant.

In its latest trading update, the company said, “Drax has received positive engagement with data center providers regarding the potential to co-locate a data center with biomass generation, and Drax continues to explore such opportunities.”

The company said it would provide further information on potential data center proposals in its annual report, which is set to be published on Thursday.

Drax recently agreed to a bridging agreement with the UK government to keep its power station running from 2027 to 2031. The plant, which generates 2.3GW of electricity from biomass, plans to deploy carbon capture and storage technology linking to two of the four generating units at the Selby site from 2031.

The other two generating units with a combined capacity of 1.32GW would be used in a potential supply agreement with a data center operator.

The power station provides around five percent of the UK’s electricity.

In November, it was reported that Drax was looking for potential buyers within the data center market for energy from its biomass-fired plant.

According to the Yorkshire Post, which first reported this story, the plans to power a data center would fit within the UK government’s push to support AI growth in the UK market.

The power station has faced fierce criticism from environmentalists, who have called it one of the UK’s leading carbon emitters. This is disputed by Drax, which contends that burning wood is carbon neutral, because the trees which are cut down can ultimately be replanted.

The UK government announced its AI action plan last month. The plan proposes creating AI growth zones to help encourage data center developments and pledges to build a new supercomputer to boost UK compute power.