Tag: battery storage

Why investors are flocking to the energy powerhouse that is Scotland

8 June 2026

Opinion

This article first appeared in The Scotsman.

The conversation about energy is often framed as a choice: security or affordability, climate ambition or economic growth, urgent action or long-term planning. But that is a false divide. Households, businesses and communities want a power system that is dependable, affordable, and capable of supporting a lower-carbon future.

That was reflected in the recent Scottish Parliament debate, “It’s Scotland’s Energy”, which underlined the growing importance of the subject to the country’s economic future, and increasingly its politics. The debate may have taken place in Holyrood, but the issues it raised matter for all the UK.

Scotland is exceptionally well placed to help solve the UK’s energy challenges. As Britain’s electricity system evolves, long-term investment is increasingly flowing to the places with the renewable resources, engineering capability and network infrastructure to support a more flexible power system. Scotland stands out on all three, and this is being recognised by investors.

Late last year, ScottishPower announced plans to invest up to £12 billion to transform the grid, and SSE announced it was generating £3.4bn for Scotland’s economy as it delivers on its five-year investment plan.

Scotland’s strengths

Scotland has been central to Britain’s energy story for decades. With abundant renewable resources, a resilient and modern grid, and deep engineering expertise, Scotland has established itself as a true energy hub.

In 2025, Scotland generated record levels of renewable energy, while continuing to export surplus power to the rest of the UK. Its position as an energy powerhouse means it is also home to a highly skilled workforce with generational expertise.

Alongside the dedicated workforce, Scotland’s unique geography and heritage offer significant structural advantages. It’s home to some of Europe’s strongest offshore wind resources, with considerable opportunities for future development. It has long been at the heart of Britain’s hydroelectric industry and remains home to many of the UK’s most important, long-duration energy storage assets.

These technologies may not always attract the same attention as nuclear power or solar parks, but they will be essential to delivering a reliable, low-carbon power system.

Bringing greater stability to the National Grid

Generating renewable power is only one piece of the energy transition puzzle. As more wind and solar power comes online, and as transport, heating and industry continue to electrify, Britain’s electricity system will need to manage rising demand while balancing increasingly variable sources of generation.

Developing a reliable system under these conditions requires technologies capable of responding quickly and flexibly to today’s demands. This means long-duration storage technologies such as pumped-storage hydro and battery energy storage systems, or BESS, will play an even more central role in the transition.

These solutions allow the grid to respond more effectively to supply and demand fluctuations, while aiding long-term system stability. In fact, the National Energy System Operator has identified long-duration energy storage as a critical component of delivering a secure, decarbonised electricity system by 2035.

However, storage alone is not enough to solve the challenge. We also need significant investment in transmission infrastructure capable of moving renewable electricity. As Scotland’s capacity continues to expand, strengthening connections between the regions and nations is also important, lowering system costs and ensuring power can reach homes and businesses across the country.

Reducing exposure to shocks

Recent memory tells us we can’t take energy security for granted. The global gas crisis triggered by Russia’s invasion of Ukraine exposed the vulnerabilities that can emerge when energy systems lack resilience. Even today, UK industrial electricity prices remain among the highest in Europe, creating challenges for competitiveness, manufacturing and investment.

Scotland has worked to create an environment that encourages sustained, long-term investment. Recently, the Scottish Government committed to invest up to £500 million over five years to support offshore wind infrastructure, manufacturing and supply chains. Additionally, the UK Government’s National Wealth Fund, Great British Energy and the Scottish National Investment Bank backed the development of the Pentland Floating Offshore Wind Farm, which could power up to 70,000 homes.

Last month, I saw first-hand how Scotland’s energy assets are supporting the whole of the UK. I visited colleagues at Drax’s Cruachan Power Station in Argyll, which this year celebrated its 60th anniversary, and where we are investing £80m in a refurbishment programme designed to increase generating capacity and strengthen the long-term role of pumped storage hydro in Britain’s electricity system.

At Glenlee in Dumfries and Galloway, which has been generating renewable power for almost 90 years, we installed solar panels at our plant, making it the first of eight planned solar projects across our Scottish hydro assets. In the wider sector, projects such as Zenobē’s Coalburn battery storage facility demonstrate growing confidence in Scotland’s role as a centre for large-scale energy storage and grid innovation.

The value of investments like these extends far beyond the energy system itself. They support jobs, strengthen local supply chains and generate opportunities for communities. Scotland’s energy strength isn’t just beneath the seabed or in the wind, it’s in its people.

Too often, the energy debate is framed as a choice between competing priorities. In reality, energy security, affordability and decarbonisation depend on one another. Getting them right will help deliver a stronger economy and a more resilient future.

Our shared ambitions require continued support, but investment in the necessary infrastructure is already underway. This is particularly true in Scotland, which will have a pivotal role in helping Britain deliver that future.

The opportunity to strengthen Britain’s energy security, support economic growth and accelerate the transition to a lower-carbon power system is significant – and so is the responsibility to deliver it.

Betting on batteries: addressing intermittent inefficiencies at scale

2 June 2026

Opinion

This article has been republished with permission from ESS News.

As shockwaves from the Iran war continue to ripple through global oil and gas markets, countries across Europe have experienced soaring energy prices. Here in the UK, the average consumer’s power bill price cap has already spiked 18% per year, while businesses are experiencing increases of up to 80%.

At the same time, Spain has been largely insulated from the same supply chain disruptions. Over the last six years, it has invested heavily in renewables – predominantly wind and solar – reducing the influence of fossil generators on its electricity price by 75% since 2019. Many renewables also offer a differentiated source of domestically produced power, which reinforces energy independence and security while hedging against single-source supply chain shocks.

This is yet another proof point that weather-dependent renewables are grid gamechangers, but it’s important to acknowledge that they cannot address all of the challenges we are trying to solve in the UK. We need to keep investing in the wider system.

A high-renewables grid: managing variability with flexibility

Not only do weather-dependent renewables support energy security, but they’re now cost competitive with fossil fuels. However, because intermittent renewables are dependent on external forces like wind and sunshine, they need complementary sources of flexibility to keep supply and demand balanced in real time to address:

Oversupply and curtailment. When the sun is shining and the wind is blowing at full force, energy generation sometimes exceeds demand and/or grid capacity limitations. As a result, the UK spends more than £1 billion annually on curtailment, where the government pays generators to reduce or turn off output during these periods.
Undersupply and “Dunkelflaute” risk. The weather patterns that hinder wind and solar often offset each other, but sometimes both can falter at the same time. This occurrence – referred to via the German term “Dunkelflaute” – is more likely to occur in the winter, resulting in supply drops right when demand to heat and power homes is at its highest.
Day-to-day swings. In a typical day, intermittent renewables have periods of high and low production. At the same time, demand also has high and low periods. These supply low points often correlate with periods of high demand; for example, as solar generation falls away with the sunset, at-home lighting and appliance usage ramps up. This can result in grid strain and higher energy prices during the times when power is needed most but renewables are less available.

The “Duck Curve” is an industry term that refers to the shape created by the peaks and troughs of contrasting energy demand and intermittent renewable energy supply. The chart above visualizes the typical “duck” shape: a high morning peak (the tail), a deep midday dip (the belly) caused by record solar, and a steep evening ramp (the neck) as the sun sets and household demand spikes.

From national security to data security, the UK relies on consistent access to responsible, affordable power. Managing these swings is an integration challenge – not a reason to slow renewables. It’s a reason to accelerate the tools that make a high-renewables grid work to solve inefficiencies and unpredictability that can undermine the system, particularly during times of stress.

Balancing – not compensating for – intermittent volatility

Baseload generation is another key ingredient to stabilise the grid, helping to compensate for these supply swings. While this foundational support has traditionally been supplied through fossil fuels like coal, the UK has moved to more responsible alternatives like natural gas and sustainable biomass to anchor grid fluctuations.

Baseload generation supports grid stability, and weather dependent renewables are also essential but together they still cannot directly address when clean power is produced at the “wrong” time or the “wrong” place. This is where energy storage steps in.

Energy storage, including batteries, pumped hydro, thermal, and chemical solutions, complements intermittent power generation. These technologies can capture excess clean energy when generation is high and deploy it when supply is low, balancing supply and demand and helping flatten the duck curve. Energy storage solutions can extend the benefits of clean power generation and supply, meeting peak demand even when they’re not actively generating power, all while reducing reliance on baseload generation.

The UK plans to double its energy storage by 2030, and Drax is investing in new battery storage projects in the UK accordingly. Building from Drax’s existing long-term hydro storage assets, the company is investing in new projects in the UK to bolster its battery storage portfolio and improve energy security.

Looking to the future, long-duration energy storage (LDES) batteries also have a key role to play. Current economic and market structures favour lithium-ion-based short-term batteries, but it’s only a matter of time until long-term battery technologies become more efficient and affordable, and the rate of adoption is expected to grow exponentially as a result.

Recent geopolitical conflicts have reiterated the importance of a diversified, balanced energy system. Nations that adapt toward a system built on flexible generation and storage – designed to deliver reliability, affordability, and sustainability while insulating against future shocks – will have a clear advantage, both today and in years to come. We believe there is no better time than now to bet on batteries as part of the UK’s evolution to a more flexible energy system.

Why the energy transition demands a new playbook

1 June 2026

Opinion

During the last bank holiday weekend, as Britain basked in the sunshine, the national grid quietly made history. Demand plummeted to an all-time low of just 12.6GW – roughly the average daily demand of the Philippines. This was nearly four times less than we consumed on a cold, dark Thursday evening in January when the nation cranked up the heating and turned on the kettle.

Seasonal demand swings are nothing new, and for decades have proved a rule that traditional, dispatchable assets like Drax Power Station are the backbone of our energy security. But in this week of warm weather and unprecedented low demand, solar has generated as much as half of the power Britain consumed – an unthinkable achievement ten years ago.

Intermittent wind and solar, battery storage, electric vehicles and AI are changing our energy system profoundly and in real time. How government, the system operator and companies like Drax manage this change can be measured not in the millions but in the billions of pounds of difference to the British economy every year.

At Drax our mission has always been to deliver what the country needs. For over sixty years, our assets have provided secure electricity to millions of the UK’s households and businesses. When climate change became a national imperative, we did what many thought impossible and transformed Western Europe’s largest coal fired power station into Britain’s largest single source of renewable electricity. Today, we are once more investing to deliver in the national interest.

Our recommended offer for Bluefield Solar Income Fund is a key moment for our business and its next phase. This would be the largest deal in our history, and with BESS and OCGT development sites included, our renewable generation business and flexible generation assets combined will have a larger power capacity of over 3GW than Drax Power Station’s 2.6GW for the first time.

Potentially adding around 900MW of solar and wind with another 2.9GW pipeline of development, including JVs, into the Drax portfolio could mean we are able to keep the lights on whether it is a baking hot bank holiday or a damp and dreary January. And critically the cost of power generated by solar and wind is not impacted by the ongoing situation in the Strait of Hormuz.

We’re building a diverse portfolio of hydro, batteries, gas, and now potentially wind and solar alongside a trading capability that will enable us to help deliver the UK’s energy security efficiently and affordably. We’re proud to have been at the heart of Britain’s energy system for sixty years, and we’re investing in and evolving our business now to ensure we continue to deliver what the country needs for decades to come.

Please find the full announcement of the recommended acquisition of BSIF through the following link: https://polaris.brighterir.com/public/drax_group/news/rns/story/r7kk2zw

Trading Update – supporting the UK power system with reliable and renewable energy

30 April 2026

Financial News

^{RNS Number: 4793C}^{Drax Group plc}
^{(“Drax” or the “Group”; Symbol:DRX)}

Highlights

Good operational performance across the Group
Full year 2026 expectations for Adj. EBITDA⁽¹⁾ in line with consensus estimates⁽²⁾
£450m buyback – first £75m tranche complete, second £75m tranche to commence May 2026
Final dividend of 17.4 pence per share, subject to shareholder approval at today’s AGM
Flexitricity acquisition complete

Drax Group CEO, Will Gardiner, said:

Will Gardiner, Drax Group CEO

“We have started the year well and have delivered a good operational performance across the Group, supporting UK energy security at a critical time for the country. Our assets, colleagues and supply chain partners have been working hard to help keep the lights on for millions of UK households and businesses through a period of acute geopolitical uncertainty.

“We are at a key moment of transition in our business and in the UK’s energy system. With our first battery storage projects and the commissioning of our first OCGT unit progressing, we are growing our UK FlexGen portfolio.

“We are excited about the potential opportunities to invest further to help the country meet its growing energy needs. We believe these opportunities could create value for stakeholders and offer attractive returns for shareholders, in line with our capital allocation policy.”

Full year expectations

Drax continues to expect 2026 full year Adj. EBITDA to be in line with consensus estimates⁽²⁾. Full year expectations remain subject to continued good operational performance.

Impact of conflict in the Middle East

The Group’s focus on flexible, dispatchable generation and renewables enables it to support a secure, lower cost UK power system, which can continue to decarbonise, by allowing more intermittent renewables to operate and helping to reduce the UK’s exposure to higher gas prices and reliance on imported power.

The Group produces on average over 5% of the UK’s electricity and around 10% of its renewable power, up to 18% at times of peak demand and on certain days over 50%⁽³⁾. The Group’s supply chain has a high level of operational redundancy, with limited exposure to underlying commodity prices, sourcing biomass primarily from North America, including from the Group’s own facilities in the US South.

To help maximise output at times of high demand, the Group is continuing to optimise generation across its portfolio to deliver power when it is needed most.

Regulatory update

In April 2026, the UK Government announced its intention to remove the UK Carbon Price Support (CPS) mechanism from April 2028, which has been used over the last decade to encourage a reduction in fossil fuel use, contributing to the phase out of coal generation from the UK power system. The change to CPS does not change the Group’s expectations.

In January 2023, the UK Government introduced the Electricity Generator Levy (EGL) in response to higher wholesale power prices. In April 2026, the Government announced an extension of the scheme beyond March 2028 and an increase in the levy. Drax does not currently expect to pay any EGL in 2026 and does not expect it to have any impact on Adj. EBITDA in 2026. From April 2027 Drax Power Station will operate under a CfD agreement which is not subject to the EGL.

FlexGen

Pumped Storage – Cruachan Power Station

Units 1 and 2 are continuing to perform well, providing flexible power generation and a wide range of system support services.

An investment to refurbish and upgrade two units is progressing, with units 3 and 4 undertaking a planned outage programme through 2026 and 2027. The project is underpinned by a 15-year Capacity Market agreement worth over £220 million⁽⁴⁾ (c.£15 million Adj. EBITDA pa) and will add 40MW of additional capacity and improve unit operations.

In late December 2025, a grid connection failure caused by assets owned by Scottish Power Energy Networks (SPEN) has resulted in an ongoing forced outage on units 3 and 4. SPEN is working with Drax to restore the connection.

Open Cycle Gas Turbines (OCGTs)

Drax expects to assume control of Hirwaun Power Station (Hirwaun), in South Wales, shortly. Hirwaun is the first of three 299MW OCGT plants which Drax is developing in England and Wales.

Battery Energy Storage System (BESS)

In March 2026, Drax completed the acquisition of Flexitricity, an optimiser of flexible energy assets, with a scalable platform expected to support the Group’s ambition to develop a GW scale pipeline of BESS opportunities. Flexitricity’s capabilities complement acquisitions and agreements put in place by Drax between October 2025 and February 2026 for c.710MW⁽⁵⁾ (c.1.8GWh) of physical assets and tolling contracts, for total commitments of c.£500 million. Operations are expected to commence from the end of 2027.

Drax is continuing to explore a pipeline of additional opportunities.

Capacity Market agreements

In March 2026, Drax provisionally secured agreements to provide a total of 434MW of capacity (de-rated 399MW) principally from its pumped storage and hydro assets⁽⁶⁾. The agreements are for the delivery period October 2029 to September 2030, at a price of £27/kW/year⁽⁷⁾, with income of c.£11 million in that period. These are in addition to agreements for existing assets which extend to September 2029.

Taken together with existing agreements for pumped storage, hydro and OCGTs, Drax has c.£650 million of index-linked Capacity Market agreements, providing high-quality earnings which extend visibility of the Group’s contracted earnings to 2043.

Pellet Production

The Group’s Pellet Production business is performing well, with a continued focus on cost reduction in its US operations, supporting UK energy security via biomass generation at Drax Power Station. A strategic review of the Group’s Canadian operations is ongoing.

Against the backdrop of growing demand for energy security Drax continues to see long-term potential for new and existing markets for bioenergy, which can offer an alternative to fossil fuels, including in the production of sustainable aviation fuels and other industrial processes.

Biomass Generation

Drax Power Station, the UK’s largest single source of 24/7 renewable power, is performing well, supporting UK energy security with flexible and reliable renewable power generation and a wide range of system support services. A major planned outage on one unit is scheduled for the summer.

Generation contracted power sales

As at 28 April 2026, Drax had over £1 billion of contracted forward power sales between 2026 and 2028 on its Renewables Obligation (RO) biomass, pumped storage and hydro generation assets, with over £800 million of associated ROCs. RO generation is fully hedged for 2026. Since its last update on 26 February 2026, the Group has continued to optimise output as the market has moved, adding 0.2TWh (net) to this position at an average price of £200.9/MWh.

Contracted power sales as at 28 April 2026	2026	2027	2028	Total

Net RO, hydro and gas (TWh)⁽⁸⁾	11.1	2.1⁽⁹⁾	0.2	13.4
Average achieved £ per MWh⁽¹⁰⁾	79.7	79.4	70.6	79.6
Contract for Difference (CfD) (TWh)	2.9	-	-	2.9

Capital returns

In July 2025, Drax announced a share buyback programme for the purchase of up to £450 million of Drax shares. The programme commenced in October 2025 with a first £75 million tranche, which completed in April 2026. A second £75 million tranche is expected to commence in May 2026.

The total number of voting rights in Drax Group, excluding treasury shares, as at 28 April 2026 was c.336.2 million.

In February 2026, a final dividend of 17.4 pence per share was proposed, subject to approval at the 2026 Annual General Meeting (today, 30 April 2026).

Strategy

Drax is continuing to assess opportunities to invest in energy security, primarily in flexible and renewable energy in the UK, which could support earnings growth.

The Group continues to evaluate opportunities to maximise value from the Drax Power Station site, including the potential for a c.100MW data centre (with an ambition to grow to a >1GW data centre post 2031), as well as other generation sources.

The Group is also assessing options for other renewables projects to complement its portfolio.

Other matters

Drax will report its half year results on Thursday 30 July 2026.

Notes:

Earnings before interest, tax, depreciation, amortisation, excluding the impact of exceptional items and certain remeasurements.
As of 23 April 2026, analyst consensus for 2026 Adj. EBITDA was £665 million, with a range of £643 – £682 million. The details of this consensus are displayed on the Group’s website. Consensus – Drax Global
Measured by output Q1 2025 to Q4 2025. Source: Drax and Elexon
2025, real-terms.
In October 2025, Drax signed an agreement with Apatura Limited to acquire three BESS projects, which when fully commissioned will provide capacity totalling 260MW. All transactions have now completed and are expected to begin entering service from late 2027 onwards.
In February 2026, Drax signed tolling agreements with Fidra and Zenobē for 450MW (1.3GWh) of BESS. Under the agreements Fidra and Zenobē will retain responsibility for construction, maintenance and availability of the asset during the contract period. In return Drax will pay a fixed annual tolling fee from the commercial operation date, in return for full operational control and dispatch rights, and retaining all revenues (excluding Capacity Market and certain other ancillary revenues). The assets are expected to enter service from 2028.
Cruachan Pumped Storage (units 1 and 2), the Lanark and Galloway hydro schemes (Bonnington, Carsfad, Drumjohn, Earlstoun, Kendoon, Stonebyres, Tongland) and three small legacy gas turbines at Drax Power Station.
Capacity Market T-4 2029/30 auction real clearing price, with clearing price indexed to UK CPI prior to Delivery Year.
Includes 0.1TWh of structured power sales in 2026 (forward gas sales as a proxy for forward power), transacted for the purpose of accessing additional liquidity for forward sales from RO units and highly correlated to forward power prices.
Contracted power sales to March 2027 for biomass units operating under the RO, after which the units will operate under a CfD mechanism.
Presented net of cost of closing out gas positions at maturity and replacing with forward power sales.

Enquiries:

Drax Investor Relations:
Mark Strafford
[email protected]
+44 (0) 7730 763 949

Chris Simpson
[email protected]
+44 (0) 7923 257 815

Media:

Drax External Communications:
Chris Mostyn
[email protected]
+44 (0) 7743 963 483

Andy Low
[email protected]
+44 (0) 7841 068 415

Website: www.Drax.com

Forward Looking Statements

This announcement may contain certain statements, expectations, statistics, projections, and other information that are, or may be, forward looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plans, beliefs, and objectives for the management of future operations of Drax Group plc (“Drax”) and its subsidiaries (the “Group”), are not warranted or guaranteed. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. Although Drax believes that the statements, expectations, statistics and projections and other information reflected in such statements are reasonable, they reflect Drax’s current view and no assurance can be given that they will prove to be correct. Such events and statements involve risks and uncertainties. Actual results and outcomes may differ materially from those expressed or implied by those forward-looking statements. There are a number of factors, many of which are beyond the control of the Group, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These include, but are not limited to, factors such as: future revenues being lower than expected; increasing competitive pressures in the industry; uncertainty as to future investment and support achieved in enabling the realisation of strategic aims and objectives; and/or general economic conditions or conditions affecting the relevant industry, both domestically and internationally, being less favourable than expected, including the impact of prevailing economic and political uncertainty, the impact of conflict including those in the Middle East and Ukraine, the impact of cyber-attacks on IT and systems infrastructure (whether operated directly by Drax or through third parties), the impact of strikes, the impact of adverse weather conditions or events such as wildfires, changes to the regulatory and compliance environment within which the Group operates. Drax do not intend to publicly update or revise these projections or other forward-looking statements to reflect events or circumstances after the date hereof, and we do not assume any responsibility for doing so.

END

Tag: battery storage

Why investors are flocking to the energy powerhouse that is Scotland