Specialist engineering services firm Doosan Babcock has secured a new long-term contract for the provision of maintenance and outage services with Britain’s largest power station Drax Power.
The four-year deal is worth at least £60m and sees Doosan Babcock continue its relationship, which dates back to the construction of the plant near Selby over 45 years ago, with the power producer.
Andy Colquhoun, CEO of Doosan Babcock, said: “Drax Power is one of the most progressive and innovative companies in the global energy sector so we are delighted to deepen our strategic relationship.
“This new agreement provides a platform for further collaboration in the years ahead as Drax continue to invest and evolve their assets.”
In October, Drax agreed a deal to acquire the portfolio of Scottish Power’s assets for £702m with the North Yorkshire-based power producer attempting to add further flexible sources of energy to its offering.
It acquired the portfolio of pumped storage, hydro and gas-fired generation from utility company Iberdrola with the sale leaving Scottish Power to generate 100 per cent of electricity with clean wind power.
Mr Colquhoun said the deal allows Doosan Babcock to help Drax as the power producer transforms its business.
He said: “We have a long and proud history with Drax, from supplying the original boilers over 40 years ago, to supporting Drax as it transforms its business to meet the demands of the modern energy market.”
The four-year partnership has an option for a further four years.
In recent years, Drax has pivoted to biomass. Doosan Babcock has been helping the business deliver key technologies in the conversion process. Andy Koss, CEO of Drax Power, said: “It’s vital Drax continues to operate as reliably and flexibly as possible for the millions of homes and businesses which rely on the electricity we produce.
“This new contract will bring a closer working relationship with the Doosan Babcock team, delivering efficiencies whilst maintaining the high quality of work and standards of service required to maintain the UK’s biggest power station.
“We have converted two thirds of the power station to use biomass instead of coal, transforming the business to become the UK’s biggest renewable power generator and the largest decarbonisation project in Europe.
“This, along with our plans to repower our remaining coal units to use high efficiency gas, is preserving the future of the power station and protecting jobs – our operations support 5,700 jobs across the North and generate £600m for the regional economy.”
Drax Power plans to repower two remaining coal units to use high efficiency gas turbine technology and build up to 200MW of battery storage on site to provide additional flexibility.
If plans are approved, Drax could stop using coal as soon as 2023, ahead of the government’s 2025 deadline for unabated coal to no longer be used in power generation. Doosan Babcock says it will continue to support Drax throughout this transition.
“This agreement is testament to the hard work and dedication of our team, consistently delivering exceptional performance,” Mr Colquhoun said. “Recently, we passed the milestone of over three million man-hours achieved over nine outages without a ‘Lost Time Incident’ dating back to 2014.”
Scottish power deal is revised
Drax has revised the terms of its deal to buy Scottish Power from assets to ensure it gets a rebate on lost capacity payments..
Last month, 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.
Therefore, it has agreed a risk-sharing scheme with Scottish Power owner Iberdrola.