Drax Group has signed an agreement to acquire three battery energy storage system (BESS) projects from Apatura, marking a significant step in the company’s efforts to bolster energy security and support the UK’s transition to a cleaner power system. These projects will help further develop Drax’s capability to deliver dispatchable power as we become more dependent on an ever-growing share of renewable energy.
The acquisition features first-class permitting and property agreements for three ready-to-build BESS sites, with a total of 260 megawatts (MW) of capacity. Of these three sites, two are located in Scotland and the other in Northern England. Construction is expected to start at all locations in 2026. We look forward to our first Scottish site being operational by 2027. We look forward to closing on the first two of these projects’ acquisitions in 2025. The completion of the third project is currently set for the first quarter of 2026.
Commitment to Energy Security
Drax’s acquisition comes at a very timely period. The decommissioning of legacy thermal generation infrastructure and growing power demand are accelerating the call for more resilient, powerful solutions. The UK’s energy network is increasingly dependent on intermittent renewables, which the company recognizes. As a result, reliable and dispatchable power generation have become increasingly key.
Will Gardiner, Drax Group CEO, emphasized the importance of this acquisition:
“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.”
Drax believes in a long-term, cost-effective and stable energy supply. This is particularly important at times when renewable generation is having difficulty producing energy to meet demand.
Project Oversight and Risk Management
Apatura will take the lead in the development of each battery storage project. They will take on virtually all of the construction risks, including cost overruns and schedule slippage. Drax recently signed a fixed cash payment for developing these projects. For example, they passed inroads contractual protections to set up a predictable investment climate.
Drax partners with Apatura to draw on its specialist knowledge in project management. By formalizing this partnership, risks are better mitigated throughout the execution of each project. This strategic partnership reflects Drax’s commitment to enhancing its energy infrastructure and providing reliable services as demand continues to grow.
Future Prospects
Through these new BESS projects, Drax is thusly setting itself up to be critical in the UK’s energy future. The company is confident the new storage capacity will further establish its long-duration energy storage and flexible generation capabilities. This addition will eventually bring its total dispatchable generation capacity up to 4.4 gigawatts (GW).
Gardiner outlined Drax’s strategic direction:
“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.”
