Drax completes purchase of Scottish power assets

By Drax Group | January 02, 2019

Drax is set to play a bigger role than ever in Great Britain’s energy system following the completion of the purchase of Spanish company Iberdrola’s portfolio of flexible, low-carbon and renewable assets, for £702 million subject to customary adjustments.

The new power stations which will increase Drax’s electricity generation capacity by 60 percent, means the company will now provide enough power for the equivalent of more than 8.3 million homes.

Commenting on the completion of the deal Will Gardiner, CEO of Drax Group, said, “As a British energy company, we are very proud to be the new owners of these critically important power stations across England and Scotland. For decades Drax has been at the heart of our energy system and now we’re going to play a bigger role than ever.

“We are investing in Great Britain by acquiring this portfolio of flexible, low-carbon and renewable generation assets. They complement our existing activities by providing very flexible power which not only keeps the lights on for thousands of households, but also provides crucial system support services to the grid, maintaining secure supplies and enabling more renewables like wind and solar onto the system.”

The deal adds 2.6 GW of generation capacity to Drax’s portfolio, reinforcing its position at the heart of the Great Britain’s energy system. Drax have national footprint with operations in Scotland, Wales, Yorkshire, Lancashire, London, the East of England, the East Midlands and the South East of England.

The combination of hydro plants in Scotland with Drax’s biomass units in Yorkshire reinforce the company’s position as Great Britain’s biggest generator of renewable power. With the addition of 35 percent of Great Britain’s electricity storage capacity and 2 GW of gas power stations Drax will also be better placed to provide the flexibility and stability to help underpin the increases in solar and wind power which will be needed in the decades to come if the U.K. is to meet its climate targets.

The 2.6GW portfolio consists of Cruachan pumped storage hydro (440 MW) in Argyll, run-of-river hydro locations at Galloway and Lanark (126 MW) and a biomass-from-waste facility at Daldowie in Scotland as well as four Combined Cycle Gas Turbine stations in England: Damhead Creek (805 MW) in Kent, Rye House (715 MW) in Hertfordshire, Shoreham (420 MW) in West Sussex and Blackburn Mill (60 MW) in Lancashire.

The sites are complementary to Drax’s existing generation activities and means the company has developed from a single-site generation business into a multi-site, multi-technology operation.

Drax Power Station in Selby, North Yorkshire, is the biggest renewable generator in the U.K. Over the last decade Drax has converted two-thirds of what was Great Britain’s biggest coal fired power station to run on sustainable biomass, creating the largest decarbonization project in Europe.

Drax Group is now the Great Britain’s fifth largest non-domestic energy supplier and the biggest supplier of renewable power to U.K. businesses and organizations with over 350,000 now being provided with 100 percent renewable power.

The acquisition was announced on Oct. 16, 2018.

On Dec.3, 2018, following the suspension of the capacity market, Drax announced a risk sharing agreement with Iberdrola, linked to 2019 capacity markets payments.

Shareholders approved the deal at a General Meeting held on Dec. 21, 2018.

The acquisition formally completed on Dec. 31, 2018.