Drax completes purchase of Iberdrola’s portfolio of flexible, low carbon & renewable assets
Drax will play bigger role in Great Britain’s energy system providing enough power for the equivalent of more than 8.3 million homes
Acquisitions ensure Drax can help support a power system with increasing intermittent renewable capacity by providing flexible generation and system support
Deal diversifies Drax portfolio and widens UK footprint
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%, 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, Chief Executive Officer 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 2.6GW 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% of Great Britain’s electricity storage capacity and 2GW 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 UK is to meet its climate targets.
The 2.6GW portfolio consists of Cruachan pumped storage hydro (440MW) in Argyll, run-of-river hydro locations at Galloway and Lanark (126MW) and a biomass-from-waste facility at Daldowie in Scotland as well as four Combined Cycle Gas Turbine stations in England: Damhead Creek (805MW) in Kent, Rye House (715MW) in Hertfordshire, Shoreham (420MW) in West Sussex and Blackburn Mill (60MW) 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 UK. 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 decarbonisation 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 UK businesses and organisations with over 350,000 now being provided with 100% renewable power.
The acquisition was announced on 16th October 2018.
On the 3rd December 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 21st December 2018.
The acquisition formally completed on 31st December 2018.
Drax External Communications:
Notes to editors
Regional press releases:
- Rye House Power Station in Hertfordshire
- Damhead Creek Power Station in Kent
- Shoreham Power Station in Portslade, West Sussex
- Cruachan Power Station in Argyll and Bute
- Galloway Hydro Scheme
- Lanark Hydro Scheme
Drax Group’s ambition is to enable a zero carbon, lower cost energy future. Its 2,600-strong staff operate across three principal areas of activity – electricity generation, electricity sales to business customers and compressed wood pellet production.
Drax owns and operates a portfolio of flexible, low carbon and renewable electricity generation assets across Great Britain. The assets include the UK’s largest power station, based at Selby, North Yorkshire, which supplies six percent of the country’s electricity needs.
Having converted two thirds of Drax Power Station to use sustainable biomass instead of coal it has become the UK’s biggest renewable power generator and the largest decarbonisation project in Europe.
Its pumped storage, hydro and energy from waste assets in Scotland include Cruachan Power Station – a flexible pumped storage facility within the hollowed-out mountain Ben Cruachan. It also owns and operates four gas power stations in England.
Drax owns two B2B energy supply businesses:
- Haven Power, based in Ipswich, supplies electricity and energy services to large Industrial and Commercial sector businesses.
- Opus Energy, based in Oxford, Northampton and Cardiff, provides electricity, energy services and gas to small and medium sized (SME) businesses.
Drax owns and operates three pellet mills in the US South which manufacture compressed wood pellets (biomass) produced from sustainably managed working forests. These pellet mills supply around 20% of the biomass used by Drax Power Station in North Yorkshire to generate flexible, renewable power for the UK’s homes and businesses.
For more information visit www.drax.com/uk