Drax has signed an agreement with Apatura to acquire three battery energy storage system (BESS) projects, which when fully commissioned will provide capacity totalling 260MW.
Drax will pay £157.2m in staged payments between 2025 and 2028, reflecting construction milestones and including payments to Apatura linked to their delivery of the projects. Completion of the acquisition of the first two projects is expected to occur in 2025 with completion of the third project expected in Q1 2026.
Drax Group CEO, Will Gardiner said: “This acquisition is our first investment in short duration storage as part of our FlexGen portfolio, supporting UK energy security and a clean power system.
“We are looking forward to working with Apatura on the development of battery storage, which when commissioned will allow us to provide even more secure power to the country when it is needed. In combination with our long duration energy storage, flexible generation and renewable generation from biomass, we will be able to provide 4.4GW of dispatchable generation to meet demand.
“As the UK’s network increases its reliance on intermittent renewables, more dispatchable and reliable generation will be required to help keep the lights on when the wind isn’t blowing or the sun isn’t shining.
“Through the development of our strategy we are working to create value and growth in the short, medium and long-term, aligned to the UK’s energy needs and underpinned by strong cash generation, a disciplined approach to capital allocation and attractive returns for shareholders, significantly in excess of our weighted average cost of capital.”
The 260MW 2-hour duration development portfolio consists of three ready-to-build BESS sites, two in Scotland and one in Northern England.
Construction on all three sites is expected to commence in 2026 with the first site in Scotland due to be operational in 2027. Apatura will manage the development of the projects and bear the majority of the construction risk.
Linked to the transaction, Drax has agreed the option of a right of first offer over a further eight sites (289MW) being developed by Apatura.
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