Publication of Circular and Notice of General Meeting in relation to proposed acquisition of flexible, low-carbon and renewable UK power generation from Iberdrola
RNS Number : 4484R
Drax Group PLC
Drax confirms that it has provisionally secured contracts to provide 1,203MW of derated capacity, from existing units, in the 2016 T-4 capacity market auction. The contracts are for the delivery period October 2020 to September 2021, at a price of £22.5/kW(1) and are worth £27 million.
Two Open Cycle Gas Turbine (OCGT) development projects participated in the auction but exited above the clearing price. It is expected that these projects will now go on to participate in the 2017 T-4 auction.
The purchase of these projects, along with two others, was announced by Drax on 6 December(2). The initial purchase price for all four projects was £18.5 million, with the total consideration payable dependent on the clearing price in future capacity market auctions(3).
Drax Investor Relations: Mark Strafford
+44 (0) 1757 612 491
Drax External Communications: Paul Hodgson
+44 (0) 1757 612 026
(1) 2015 real.
(2) On Tuesday 6 December Drax announced that it had entered into an agreement with Watt Power Limited, a developer of OCGT assets, to acquire four 299MW OCGT development projects. OCGTs are gas-fired power plants that can be used by Drax to provide flexible support to the electricity system to make up any shortfall in generation.
Two of these projects are in an advanced stage of development and participated in the 2016 T-4 capacity market auction. The other two projects require further development in anticipation of their targeted participation in the 2019 T-4 capacity market auction.
The details of the OCGT projects, each with capacity of 299MW, are as follows:
a. Progress Power Limited is a company holding a proposed development on land located at Eye Airfield in mid-Suffolk. The site has a Development Consent Order (DCO)
b. Hirwaun Power is a company holding a proposed development on land located at Hirwaun Industrial Estate, Aberdare in the County of Swansea. The site has a Development Consent Order (DCO)
c. Millbrook Power is a company holding a proposed development on land located at Rookery South Pit near Marston Moreteyne in Bedfordshire
d. Abergelli Power is a company holding a proposed development on land located at Abergelli Farm, in the County of Swansea
(3) The range of consideration payable for the four assets is £18.5 million to £90.5 million, dependent on the capacity market auction clearing price, with the top of this range being associated with a price of £75/kW (the current 2016 auction price cap).