Tag: Flexgen

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

Commissioning of First OCGT Plant

29 May 2026

News

RNS Number: 1217G
Drax Group plc
(“Drax” or the “Company”; Symbol:DRX)

Drax is pleased to announce that commissioning of Hirwaun Power Station is now complete and Drax has assumed commercial control from the developer Metlen Energy & Metals. Hirwaun, which is located in South Wales, is the first of three 299MW Open Cycle Gas Turbine (OCGT) plants which Drax is developing in England and Wales.

Drax Group CEO, Will Gardiner, said: “The successful commissioning of our first OCGT plant is a landmark moment for Drax.

“The energy transition is creating opportunities for us to invest and grow our business in line with the country’s energy needs. Alongside our OCGT developments, we have made initial investments in Battery Energy Storage Systems (BESS), which we see as an attractive market. We are continuing to explore options to invest in flexible and renewable energy, supporting energy security, creating value for stakeholders and attractive returns for shareholders in line with our capital allocation policy.”

The three OCGTs combined will provide capacity of c.900MW when fully commissioned and be remunerated via a combination of peak power generation, system support services, and long-term index-linked Capacity Market agreements. These Capacity Market agreements extend to 2039 and are worth over £260 million in revenue.

The sites benefit from a low fixed cost base with operation and dispatch managed centrally by Drax and day-to-day management of the sites by Siemens Energy.

Power generation and system support capabilities

The flexibility of OCGTs allows them to switch on and off quickly to meet periods of high demand, which supports the increased use of intermittent renewables across the UK system, supporting energy security, with a reduced dependence on fossil fuels and a reduction in net carbon emissions.

In addition, the OCGTs have been built with a clutch mechanism between the turbine and generator, allowing for them to operate as a Synchronous Compensator, which can provide additional non-generation services, such as inertia and voltage control, without engaging the gas turbine.

With the evolution of the UK market, continued roll out of renewables and an increased focus on energy security, Drax believe that demand for and value of these types of services will increase.

Featured image credit: Metlen Energy and Minerals

Enquiries:

Drax Investor Relations:

Mark Strafford
[email protected]
+44 (0) 7730 763 949

Media:

Drax External Communications:

Aidan Kerr
[email protected]
+44 (0) 7849 090 368

Website: www.drax.com

How biomass delivers system stability in an uncertain energy landscape

14 May 2026

Opinion

This article first appeared in Bioenergy Insight.

The energy landscape has fundamentally shifted over the past five years. What began as a singular focus on decarbonisation has evolved into a more complex challenge balancing climate goals with energy security, reliability and the explosive growth in power demand from artificial intelligence and data centres. For Ross McKenzie, chief sustainability officer at Drax Group, this transformation has reinforced a central thesis: that sustainable energy systems require more than just weather-dependent renewables to succeed.

‘A resilient energy mix is one that can absorb shocks without compromising reliability, affordability or sustainability,’ McKenzie explains. ‘In practice, that means balancing three complementary technology groups rather than betting everything on a single approach.’

Those three pillars, according to McKenzie, are weatherdependent renewables like wind and solar; flexible, dispatchable generation including sustainable biomass; and energy storage across multiple technologies from batteries to pumped hydro.

It’s a framework that positions biomass as a strategic asset for grid stability, rather than just a carbon-neutral fuel source. This perspective is gaining traction as power systems grapple with the reliability challenges of high renewable penetration.

The flexibility imperative

Wind and solar now comprise 35-40% of UK electricity generation and around 17% in the US, with further growth expected. However, their weather-dependent nature creates what McKenzie describes as ‘structural challenges’ during extended low-wind, low-solar periods.

‘Biomass is often assessed through the lens of carbon, land-use and deforestation, and that is an important part of the picture,’ he says. ‘But its system value is also significant. As a firm, flexible renewable source it can generate when wind and solar cannot.’

This dispatchability distinguishes biomass from other renewable sources in crucial ways. Unlike wind turbines that idle when the wind drops or solar panels that produce nothing after sunset, biomass plants can ramp up or down on demand, operating across both baseload and peak requirements to maintain grid balance.

‘As grids incorporate more intermittent renewables, extended low-wind and low-solar periods become a structural challenge,’ McKenzie notes. ‘Sustainable biomass can operate across baseload and peak demand to help keep the system balanced and secure, without adding fossil carbon to the atmosphere.’

This capability becomes increasingly valuable as renewable penetration grows. The more wind and solar capacity connects to the grid, the more critical becomes the need for flexible backup generation that can respond quickly when conditions change.

Geopolitics reshapes the conversation

‘Recent geopolitical disruption and supply chain volatility have reinforced the importance of energy security and affordability alongside decarbonisation,’ McKenzie continues. ‘That has sharpened the focus on the risks of overdependence on any single fuel source, and on the value of resilient, diversified systems.’

The result is a more nuanced policy conversation that recognises biomass not only for its decarbonisation potential but as what McKenzie calls ‘a strategic asset that can provide firm capacity and support system stability.’

In the UK and Europe, this translates into clearer emphasis on diversified low-carbon generation combining both intermittent and dispatchable sources. In the US, biomass discussions increasingly focus on strengthening domestic supply chains and supporting allies through energy exports.

‘Overall, policymakers are prioritising systems that can absorb shocks and maintain stability and predictable costs,’ McKenzie says. ‘Which elevates the role of technologies that deliver both flexibility and security.’

For Drax specifically, this shift validates its North American biomass supply chain strategy. ‘That diversification supports more stable fuel costs for Drax Power Station in the UK than a system reliant on more volatile international gas markets, while continuing to support sustainability objectives,’ McKenzie explains.

The AI factor

The emergence of AI and data centres as major electricity consumers adds another dimension to energy planning. Hyperscale companies increasingly seek 24/7 clean power solutions to meet ambitious sustainability commitments whilst ensuring uninterrupted operations.

‘Many major tech companies have set ambitious clean energy targets and are increasingly looking for firm, dispatchable generation to complement wind and solar.’

This demand profile strengthens the case for balanced generation portfolios that combine weatherdependent renewables with flexible sources and storage. Unlike traditional industrial consumers that might adjust operations based on electricity availability, data centres require constant power supply regardless of weather conditions.

‘That strengthens the case for a balanced portfolio combining renewables with flexible generation and storage to deliver reliable power when the country needs it,’ McKenzie notes.

System thinking

Drax’s approach reflects what McKenzie describes as ‘system thinking’ — viewing different technologies as complementary rather than competing assets. The company operates biomass, hydro, pumped hydro storage and is investing in battery storage, seeing each technology as contributing different capabilities to overall system stability.

‘Each contributes at different timescales providing firm capacity, flexibility and fast response, so the overall portfolio can balance variability, respond to demand in real time and support grid stability as intermittent renewable generation increases.’

This portfolio approach addresses what McKenzie characterises as the energy trilemma: delivering reliability, affordability and decarbonisation simultaneously rather than trading one objective against another.

‘In practice, energy systems must deliver reliability, affordability and decarbonisation together,’ he says. ‘A resilient approach is to build a diversified portfolio of assets so the system can manage variability and remain secure, even during periods of geopolitical disruption or supply chain volatility.’

The BECCS dimension

Looking forward, McKenzie sees Bioenergy with Carbon Capture and Storage (BECCS) as potentially transformative for biomass’s role in energy systems. BECCS combines renewable electricity generation with permanent carbon removal — a dual function that could position biomass at the centre of net-zero strategies.

‘As net zero pathways become more defined, it is increasingly clear that carbon removals, including BECCS and other biogenic solutions, can play an important role for addressing residual emissions from hard-toabate sectors,’ he says.

The UK appears wellpositioned to develop BECCS at scale, given existing biomass infrastructure and access to carbon dioxide storage capacity in the North Sea. However, McKenzie emphasises that realising this potential requires coordinated infrastructure development.

‘The UK has many of the right ingredients to progress BECCS,’ he says. ‘Realising that potential at scale will depend on turning ambition into delivery, through CO2 transport and storage networks, investable market frameworks and long-term policy support.’

If those enabling conditions come together, McKenzie sees BECCS moving ‘from a promising option to a core part of the UK’s infrastructure toolkit — supporting energy security while delivering durable carbon removals.’

Balancing act

Ultimately, McKenzie’s vision for biomass reflects broader changes in how energy systems are conceived and managed. The focus has shifted from individual technologies competing for market share to integrated systems delivering multiple objectives simultaneously.

‘The objective is not a trade-off, but a balanced system that delivers immediate security of supply while staying aligned with a credible long-term pathway to net-zero,’ he concludes.

The UK’s energy trilemma requires more than price reform

27 April 2026

Opinion

This article first appeared in Energy Voice. 

The UK Government’s move to explore breaking the link between gas and electricity prices reflects a growing recognition that the current system is exposing consumers and businesses to unnecessary volatility. While reducing exposure to gas-driven pricing is an important step, it will not single-handedly remove the UK’s vulnerability to global markets if the system remains unbalanced. 

Historically, the UK has prioritised generation sources that offer ample supply and low cost, such as coal and gas. While coal has been phased out, and renewables like wind, solar, and biomass play a larger role than ever, the UK has become increasingly dependent on gas generation as a source of energy security. 

Recently, the energy debate in the UK has become unhelpfully polarised between those who believe we are either too dependent on gas or not dependent enough. While both arguments have merit, they miss the point entirely. The global energy transition has unlocked new technologies that make balancing the trilemma – affordability, security, and sustainability – possible for the first time. 

There are four main ways the UK benefits from these new technologies: 

  • Energy security and sovereignty: A growing number of generation technologies are scaling, meaning Britain can diversify its portfolio to produce and store a greater share of its power domestically, reinforcing energy independence. This in turn helps to protect consumers from geopolitical price shocks. 
  • Technological innovation and modernisation: Technologies like AI are expected to transform industries from healthcare to defence, finance and energy. Those able to power this demand stand to disproportionately benefit from them as they scale. 
  • Economic benefits and growth: Reliable, affordable energy is increasingly critical to attracting investment across sectors such as data centres and manufacturing, and a diversified system also helps stabilise prices. 
  • Environmental survival and sustainability: Decarbonising the system remains essential. By shifting to a mix of low-impact generation technologies, the UK can reduce emissions while maintaining reliability. 

Acknowledging the challenges 

The path ahead is exciting but also filled with obstacles, some known and many not. Political and economic uncertainty remains a key barrier to a balanced energy system. Investment decisions depend on confidence that projects will deliver stable returns. Volatility in inflation, regulation and policy increases risk and slows investment. 

As policymakers consider reforms to electricity pricing and market structures, clarity and predictability will be crucial. Signals that point towards more stable, contract-based approaches to generation can help unlock investment, but only if they are consistent and long-term. 

In the UK, where energy prices are among the highest in the world, limited energy storage and dependence on gas means shocks to oil and gas markets can spike energy costs. For example, since the war in Ukraine first choked off gas supplies to Europe, the UK has spent an additional £90 billion on gas – approximately £2,000 per adult.  

Closer to home, another influence can stall vital energy projects: community concerns. Companies should listen carefully to community leaders, communicate project benefits and stages clearly and consistently, and follow through on commitments to foster trust. Community support is essential to reach a final investment decision; if trust can’t be established in enough areas, it becomes difficult to meet future market needs.  

Another barrier is increased competition. While AI offers a potential pathway to a bright future, that same promise also lures away finite investable cash from vital industries including the energy sector. At the same time, supply chain constraints are increasing costs and delaying delivery. 

Compelling opportunities for the energy industry 

At the same time, there are clear opportunities for our industry to build an energy system that works for our future. 

The AI arms race hinges on access to power, with both the private and public sectors racing to secure supply. A growing mandate for companies to BYOP (bring your own power) provides increased autonomy for hyperscalers to choose how they provide the electricity for AI, and it offers a path forward that doesn’t require taxpayers to shoulder the financial burden. This private sector demand is already accelerating investment in new generation.  

It’s also becoming increasingly clear that nations need to fortify their energy security. Access to stable power is a game-changing differentiator to attract future economic opportunity, and strong energy independence and resilience can insulate against market swings – like those from international conflicts. 

Wind, solar, hydro, sustainable biomass, and geothermal diversify national energy portfolios, supporting reliability and price stability during supply chain disruptions. They can often be produced and/or stored domestically as well, further limiting exposure. 

Identifying responsible solutions 

To reach the full potential of these defining opportunities, the UK needs the right mix of technologies. A more balanced system – combining different technologies that can provide both low-carbon and reliable, dispatchable power – will be essential to making this work in practice. 

This includes weather-dependent renewables, such as wind and solar; flexible generation, such as open-cycle gas turbines (OCGTs) and biomass, to manage intermittency; and battery storage to manage peaks in demand and improve system stability. 

Market reforms can support this transition, but they will only succeed if they are matched by a system that is built for resilience, not just efficiency. 

As Ed Miliband set out, expanding clean, domestically produced power will be central to building a more secure energy system. It offers greater stability, control and a path to energy sovereignty. 

Making this a reality will depend on how the system is designed – combining renewables with flexible and dispatchable generation to ensure reliability. The direction is clear; the challenge now is delivery. 

Tolling agreement for 200MW (800MWh) of BESS

19 February 2026

News

RNS Number: 5698T
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)

Drax is pleased to announce that it has signed a tolling agreement with Zenobē Coalburn Limited (“Zenobē”, an independent Battery Energy Storage Systems “BESS” developer)(1), for 200MW (800MWh) of new BESS capacity.

Highlights

  • Tolling agreement for 200MW 4-hour duration BESS at Coalburn, Scotland
    • No upfront capital cost – construction, maintenance and availability risk sits with Zenobē
    • 15-year tolling agreement with no indexation
    • Contract provides Drax with full operational control and dispatch rights
    • Protected grid connection, targeting a Commercial Operation Date (COD) in 2028
  • Expected returns significantly ahead of Drax’s Weighted Average Cost of Capital(2)
  • Strong strategic fit
    • Aligned with Drax’s FlexGen strategy, adding short duration and fast response capability
    • Complements Drax’s investments in physical ownership of BESS and asset optimisation
  • Closely aligned with UK energy objectives of energy security and decarbonisation

Drax Group Chief Executive Officer, Will Gardiner, said: “Flexible Generation technologies like battery storage support a secure, affordable and clean energy system for British homes and businesses. This new BESS tolling agreement, alongside our other recent tolling agreement and acquisitions of Flexitricity and three battery storage developments, shows we are building momentum in delivering a gigawatt-scale pipeline of battery storage opportunities.

“We are focused on allocating capital to growth and value creation opportunities across our FlexGen portfolio that are aligned with the UK’s energy needs, underpinned by strong cash generation and attractive returns for shareholders.”

Under the agreement 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 over the agreed term of 15 years from the COD, in return for full operational control and dispatch rights, and retaining all revenues (excluding Capacity Market and certain other ancillary revenues).

Drax sees the agreement as an attractive opportunity to provide additional BESS capacity for the Group’s FlexGen portfolio without an up-front capital payment, alongside physical ownership of BESS assets(3) and the tolling agreement announced in January 2026(4). The agreement is subject to Zenobē taking a final investment decision on the project (expected within six months of the date of the agreement) and achieving commercial operations.

Strategic fit – aligned with UK energy needs and Drax FlexGen business

Drax is developing a GW scale pipeline of BESS opportunities comprised of (1) physical assets and (2) the capabilities to optimise owned and third-party assets with the provision of route to market, floor and tolling structures.

In October 2025, Drax signed an agreement with Apatura Limited to acquire three BESS projects, which when fully commissioned will provide capacity totalling 260MW(3). In January 2026 Drax announced the acquisition of Flexitricity, providing an optimisation platform for the development of the Group’s FlexGen business, including BESS(5), and a tolling agreement for 250MW with Fidra(4).

Taken together, Drax now has agreements in place for 710MW (c.1.8GWh) of tolling contracts and physical assets, in addition to a pipeline of additional opportunities.

Notes:

  1. Zenobē | Discover Zenobē
  2. The cash flow that Drax expects to generate over the life of the contract when compared to the present value of the annual toll payments is expected to deliver a return significantly above Drax’s WACC.
  3. Acquisition of 260MW 2-hour BESS portfolio – 07:00:11 30 Oct 2025 – DRX News article | London Stock Exchange
  4. Tolling agreement for 250MW (500MWh) of BESS – 07:00:05 30 Jan 2026 – DRX News article | London Stock Exchange
  5. Acquisition of Asset Optimisation Platform – 07:00:06 21 Jan 2026 – DRX News article | London Stock Exchange

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

Kieran Wilson
[email protected]
+44 (0) 7729 092 807

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: projects achieving the required milestones, including delivery of required equipment, access to the requisite resources and completion of connections to enable operation within expected timeframes, 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 conflicts around the world; 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; and changes to the regulatory and compliance environment within which the Group operates. We 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

Demand Side Flexibility gets a winter boost

6 February 2026

Opinion

The Government’s Clean Power 2030 Action Plan and Clean Flexibility Roadmap established demand-side flexibility (DSF) as an essential component of the transition to a smarter, more flexible energy system. The Action Plan targets 10-12GW of DSF from a range of different sources by 2030, supported by actions outlined in the Roadmap.

Several updates in December 2025 reveal strong progress towards a more flexible future.

DSF Routes to Markets Review

In December, the National Energy System Operator (NESO) published its Demand-Side Flexibility Routes to Markets Review. The report highlighted progress against identified barriers for DSF participants accessing NESO flexibility services and proposed reforms to the Demand Flexibility Service (DFS). These reforms included introducing demand turn-up, locational procurement and reducing minimum unit size to 0.1MW.

NESO also announced an update to the operational metering requirements for <1MW aggregated assets within the balancing mechanism (BM). It plans to relax accuracy, refresh rate and latency requirements in early 2026 to make the BM more accessible to small scale aggregated assets.

NESO targets 750MW of I&C DSF

Following on from the Routes to Market Review, NESO set a target to add 750MW of additional industrial and commercial (I&C) flexibility to its markets by 2030. NESO’s target is for demand turn-down only and excludes transport and embedded generation. The target is designed to support the Clean Power 2030 (CP30) ambition of 1.7GW of I&C DSF by 2030, more than doubling 2024 levels.

Wider NESO actions support DSF

In its market update, NESO announced the establishment of a dedicated onboarding team for non-domestic providers to support large end consumers in accessing flexibility markets. It also extended the Local Constraints Market (LCM) until January 2027, having seen growth in demand-side participation. NESO attribute this growth to including a progressive asset metering approach, no minimum MW participation threshold, and changes to support aggregator participation.

Market Facilitator

Elexon’s role as Market Facilitator went live on 12 December 2025. As such, it will coordinate local and national flexibility market arrangements to enhance liquidity and reduce friction. It’s already established 10 market rules applicable to District Network Operator (DNO) and NESO markets, to be implemented at various points during 2026. Elexon intends to improve standardisation in matters such as carbon reporting, end-to-end processes, product definitions, prequalification for accessing markets, and primacy between different services.

Drax agrees Flexitricity purchase

Drax Energy Solutions is a decarbonisation partner for many I&C businesses across Great Britain. We support our customers in accessing revenues for flexibility, and were the largest I&C supplier in NESO’s DFS for the first two winters cumulatively. On 21 January 2026, Drax Group announced an agreement to acquire Flexitricity, a UK-based optimiser of flexible energy assets.

Founded in 2004, Flexitricity provides – via a proprietary controls platform – optimisation and route-to-market services to owners of flexible energy assets. This enables those owners to participate in the wholesale energy, balancing and ancillary services markets. Aligning the scalable platform and optimisation expertise of Flexitricity with the trading and supply expertise of Drax Group is expected to bring benefits to the customers of both companies.

We expect to complete the acquisition, which is conditional on the completion of regulatory approvals and processes, in Q1 2026.

Disclaimer: We’ve used all reasonable efforts to ensure that the content in this article is accurate, current, and complete at the date of publication. However, we make no express or implied representations or warranties regarding its accuracy, currency or completeness. We cannot accept any responsibility (to the extent permitted by law) for any loss arising directly or indirectly from the use of any content in this article, or any action taken in relying upon it.

Flexibility Focus looks at a more responsive and decentralised GB power system

5 February 2026

Opinion

Q4 2025 established new rules, targets and obligations for a more responsive and decentralised GB power system. The National Energy System Operator (NESO) set a clear ambition to unlock an additional 750MW of industrial and commercial (I&C) flexibility by 2030, reinforcing the growing role of consumer-led flexibility in supporting Clean Power 2030.

Wholesale markets were shaped by volatile wind output and mild winter temperatures. While average prices remained relatively stable, periods of low wind and high demand pushed prices above £200/MWh on three occasions, strengthening the business case for flexibility and peak demand shifting. Delivered cost arbitrage opportunities were significantly higher than in Q3 due to the application of winter third party costs. Consumers on pass-through contracts could have been able to save over £380/MWh by shifting demand from peak periods.

The Demand Flexibility Service (DFS) saw lower volumes than Q3, driven largely by mild weather and reduced system stress. However, activity shifted later into the evening peak, reflecting changing demand patterns and seasonal drops in solar generation. NESO also confirmed upcoming reforms, including demand turn-up, locational procurement, sub-1MW bids, and improved baselining for variable assets – all expected to widen participation.

On the policy and regulation side, Elexon’s new Market Facilitator role went live, introducing standardised rules designed to reduce barriers to entry across flexibility markets. Meanwhile, the upcoming launch of Slow Reserve in March 2026 will replace STOR, with more accessible thresholds and improved routes for demand-side response providers.

Looking ahead to Q1 2026, the market awaits key decisions on Capacity Market reforms, and further announcements as part of the Review of the Electricity Market Arrangements (REMA) programme, including updates to balancing reform – all of which will shape the next phase of flexibility growth.

At Drax Energy Solutions, the announced agreement to acquire Flexitricity will, once complete, strengthen our ability to help customers unlock greater value from their flexible assets and participate across an expanding range of markets.

Read the full Flexibility Focus report for detailed market analysis, policy updates and revenue insights here. 

Disclaimer: We’ve used all reasonable efforts to ensure that the content in this article is accurate, current, and complete at the date of publication. However, we make no express or implied representations or warranties regarding its accuracy, currency or completeness. We cannot accept any responsibility (to the extent permitted by law) for any loss arising directly or indirectly from the use of any content in this article, or any action taken in relying upon it.

Tolling agreement for 250MW (500MWh) of BESS

30 January 2026

News

RNS Number: 9970Q
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)

Drax is pleased to announce that it has signed a tolling agreement with West Burton C Limited, a company owned by Fidra Energy (“Fidra”, an independent Battery Energy Storage Systems “BESS” developer)(1), for 250MW (500MWh) of new BESS capacity.

Highlights

  • Tolling agreement for 250MW 2-hour duration BESS at West Burton, England
  • No upfront capital cost – construction, maintenance and availability risk sits with Fidra
  • 10-year tolling agreement with annual payments indexed to UK CPI
  • Contract provides Drax with full operational control and dispatch rights
  • Protected grid connection, targeting a Commercial Operation Date (COD) in 2028
  • Expected returns significantly ahead of Drax’s Weighted Average Cost of Capital(2)
  • Strong strategic fit
  • Aligned with Drax FlexGen strategy, adding short duration and fast response capability
  • Complements Drax investments in physical ownership of BESS and asset optimisation
  • Closely aligned with UK energy objectives of energy security and decarbonisation

Drax Group Chief Executive Officer, Will Gardiner, said: “Flexible Generation technologies like battery storage will support a secure, affordable and clean energy system for British homes and businesses. Our first BESS tolling agreement is an important step in our ambition for a gigawatt scale pipeline of battery storage opportunities, alongside our recent acquisitions of Flexitricity and three battery storage developments.

“We are working to create opportunities for growth and value creation in our FlexGen portfolio that are aligned to the UK’s energy needs, and are underpinned by strong cash generation, disciplined capital allocation and attractive returns for shareholders.”

Under the agreement Fidra 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 over the agreed term of 10 years from the COD, in return for full operational control and dispatch rights, retaining all revenues (excluding Capacity Market revenues).

Drax sees the agreement as a capital light opportunity to provide additional BESS capacity for the Group’s FlexGen portfolio, alongside physical ownership of BESS assets(3).

The agreement is subject to Fidra taking a final investment decision on the project by Q3 2026 and commercial operations by H2 2029.

Strategic fit – aligned with UK energy needs and Drax FlexGen business

Drax is developing a GW scale pipeline of BESS opportunities comprised of (1) physical assets and (2) the capabilities to optimise third-party assets with the provision of route to market, floor and tolling structures.

In October 2025, Drax signed an agreement with Apatura Limited to acquire three BESS projects, which when fully commissioned will provide capacity totalling 260MW(3). In January 2026 Drax announced the acquisition of Flexitricity, providing an optimisation platform for the development of the Group’s FlexGen business, including BESS(4).

Notes:

  1. Battery Energy Storage | Flexible Battery Electricity | Fidra Energy
  2. The cash flow that Drax expects to generate over the life of the contract when compared to the present value of the annual toll payments, is expected to deliver a return significantly above Drax’s WACC.
  3. Acquisition of 260MW 2-hour BESS portfolio – 07:00:11 30 Oct 2025 – DRX News article | London Stock Exchange
  4. Acquisition of Asset Optimisation Platform – 07:00:06 21 Jan 2026 – DRX News article | London Stock Exchange

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: projects achieving the required milestones, including delivery of required equipment, access to the requisite resources and completion of connections to enable operation within expected timeframes, 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 conflicts around the world; 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; and changes to the regulatory and compliance environment within which the Group operates. We 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