Drax: Yorkshire power station operator agrees £200m deal for Harmony Energy Income Trust

The boards of directors of Drax Bidco – a wholly-owned subsidiary of Drax – and HEIT announced earlier today that they had reached agreement on the terms of a recommended cash acquisition.

The offer marks a five per cent increase on a rival offer placed last week by investment firm Foresight.

Norman Crighton, non-executive chair of HEIT, said: "Since its launch in November 2021, HEIT has assembled a fully operational portfolio of eight 2-hour BESS projects totalling 790.8 MWh / 395.4 MV, which have attracted a strong level of interest through both our recent Asset Sale process and now through a potential bid from Foresight and the recommended offer by Drax.

“The HEIT board believes that value to HEIT shareholders will be maximised through the terms of the acquisition. Further, the HEIT Board believes that the acquisition will provide HEIT shareholders with the opportunity to realise the value of their holdings, in cash, at an attractive value which is in excess of the reasonable medium-term prospects for HEIT on a standalone basis as a listed company."

The deal is conditional on approval from HEIT’s shareholders. The groups added, however, that shareholders representing 19.6 per cent of HEIT's issued ordinary share capital were supportive of the deal and had each entered into “irrevocable undertakings” to vote in favour of the scheme.

Drax said in a statement that the acquisition represents a “highly attractive opportunity”.

Will Gardiner, the chief executive officer of Drax Group plc, added: "The Acquisition is a significant investment in growing our FlexGen portfolio, supporting UK energy security and delivering a clean power system.

“The Drax Directors believe that adding battery storage to our FlexGen portfolio enables us to provide even more secure power to the country when it is needed.

"We are working to create value and growth in the short, medium and long-term, aligned to the UK's energy needs.”

HEIT was launched in November 2021 to invest in battery energy storage systems in Great Britain. Its initial portfolio was acquired from Harmony Energy, while at the same time it entered into a pipeline agreement giving it exclusive rights to acquire further BESS projects from Harmony Energy.

The firm announced in February that its portfolio of eight battery storage projects was 100 per cent operational. HEIT also announced in February that it had seen a 147 per cent increase in operational revenue driven by increased operational capacity.

In its 2024 financial year the firm reported revenue of £16.3m and a net asset value of £201m.

Battery storage sites are designed to store power from green energy sources for use at later times. Yorkshire has been identified as a key area for battery storage sites due to its strong National Grid connections linked to past industrialisation.

The Wider Drax Group employs over 3,200 people in the UK, US, Canada and Japan, and posted a total revenue of £6.2bn in 2024 and adjusted EBITDA of £1.1bn.

Drax Bidco was launched in December of last year.