Drax power station build a 626 MW oxygen-fuelled combustion power station adjacent to the existing Drax site. National Grid would simultaneously construct a pipeline to transport to the Yorkshire coast for sequestration. In July 2014 the project was awarded €300 million funding from the European Commission. In September 2015 Drax announced it would not be making any further investments into the CCS scheme after completion of the feasibility study because negative changes to government support for renewable energy had made the project too financially risky, plus drops in the company's share price due to the same uncertainty had reduced Drax's ability to raise
Drax power station led to design improvements in equipment and plant specified by the Board, leading to a few significant areas of the design of "Completion" being altered. The second phase was completed in 1986. Construction of the power station entailed the demolition of a farm known as Wood House. Mitsui Babcock fitted flue-gas desulphurisation (FGD) equipment between 1988 and 1995. On privatisation of the Central Electricity Generating Board in 1990, the station was transferred from the Central Electricity Generating Board to the privatised generating company National Power, which sold it to the AES Corporation in November 1999 for £1.87 billion (US$3 billion).