Drax formally completes acquisition of Scottish Power assets

Drax's power station in North Yorkshire.  Picture: Charlotte Graham.
Drax's power station in North Yorkshire. Picture: Charlotte Graham.
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Power producer Drax has completed its acquisition of a portfolio of Scottish Power’s assets, providing the business further flexible sources of energy.

The Selby-based power producer announced in October that it was to acquire the pumped storage, hydro and gas-fired generation portfolio from Scottish Power’s owner Iberdrola for £702m.

Drax subsequently revised the terms of its deal to buy the Scottish Power assets to ensure it gets a rebate on lost capacity payments.

The deal marks a further move away from coal-burning power stations for Drax, which has already converted four of its six generating units to burn wood pellets.

It also sees Scottish Power become the first UK energy company to switch completely to wind power after selling its last remaining gas plant to Drax Group.

Will Gardiner, CEO 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 atthe 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.”

In November, Britain had to halt a back-up power scheme called the capacity market to avoid electricity shortages pending a further investigation by EU regulators.

Even though Drax believes that the European Commission will reapprove the existing capacity market in its current or similar form, the pause has put payments to plants it is buying in the Scottish Power deal at risk. As a result it has agreed a risk-sharing scheme with Iberdrola.