Drax completes Scottish Power portfolio acquisition from Iberdrola
In the United Kingdom (UK), power utility major Drax Plc is poised to play a bigger role than ever in the country's energy system following the completion of the purchase of Spanish company Iberdrola’s portfolio of flexible, low-carbon and renewable assets, for GBP702 million (≈ EUR 775.5 million) subject to customary adjustments. The deal adds 2.6 GW of power generation capacity to Drax’s portfolio making it the largest renewable power generator in the UK.
The acquisition, which was announced by Drax on October 16, 2018, received shareholders approval at a general meeting held December 21. 2018. On December 3, 2018, following the suspension of the capacity market, Drax announced a risk-sharing agreement with Iberdrola, linked to 2019 capacity markets payments.
The acquisition was then formally completed on December 31, 2018.
2.6 GW of additional hydro, CCGT and biomass power
The deal adds 2.6 GW of generation capacity to Drax’s portfolio, reinforcing its position at the heart of the UK’s energy system. The sites are complementary to Drax’s existing generation activities and mean the company has developed from a single-site generation business into a multi-site, multi-technology operation.
The assets consist of Cruachan pumped storage hydro (440 MW) in Argyll, run-of-river hydro locations at Galloway and Lanark (126 MW) and a biomass-from-waste facility at Daldowie in Scotland as well as four Combined Cycle Gas Turbine (CCGT) stations in England – Damhead Creek (805 MW) in Kent, Rye House (715 MW) in Hertfordshire, Shoreham (420 MW) in West Sussex and Blackburn Mill (60 MW) in Lancashire.
The new power stations which will increase Drax’s electricity generation capacity by 60 percent, means the company will now provide enough power for the equivalent of more than 8.3 million homes. It also makes Drax Group the UK’s fifth largest non-domestic energy supplier and the biggest supplier of renewable power.
With the addition of 35 percent of the country’s electricity storage capacity and 2 GW of gas power stations, Drax will also be better placed to provide the flexibility and stability to help underpin the increases in solar and wind power which will be needed in the decades to come if the UK is to meet its climate targets.