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Drax to acquire Scottish Power assets from Iberdrola

In the United Kingdom (UK), Drax Smart Generation Holdco Ltd, a wholly owned subsidiary of Drax Plc, has entered into an Acquisition Agreement with Scottish Power Generation Holdings Ltd, a wholly-owned subsidiary of Spain-headed Iberdrola S.A., to acquire Scottish Power’s portfolio of pumped storage, hydro and gas-fired generation for GBP702 million (≈ EUR 775.5 million) in cash from Spain-headed Iberdrola, subject to Drax shareholder approval.

According to a statement, the portfolio consists of Cruachan pumped storage hydro (440 MW), run-of-river hydro locations at Galloway and Lanark (126 MW), four Combined Cycle Gas Generation (CCGT) stations: Damhead Creek (805 MW), Rye House (715 MW), Shoreham (420 MW) and Blackburn Mill (60 MW), and a 50 000 tonne-per-annum biomass-from-waste facility (Daldowie).

The Acquisition is closely aligned with the operation of Drax’s existing biomass and gas options which provide the flexibility required to enable higher levels of intermittent renewable generation. The transaction, which is subject to shareholder approval and clearance by UK Competition and Markets Authority (CMA), is expected to complete on December 31, 2018.

“I am excited by the opportunity to acquire this unique and complementary portfolio of flexible, low-carbon and renewable generation assets. It’s a critical time in the UK power sector. As the system transitions towards renewable technologies, the demand for flexible, secure energy sources is set to grow. We believe there is a compelling logic in our move to add further flexible sources of power to our offering, accelerating our strategic vision to deliver a lower-carbon, lower-cost energy future for the UK. This acquisition makes great financial and strategic sense, delivering material value to our shareholders through long-term earnings and attractive returns. We are combining our existing operational expertise with the specialist technical skills of our new colleagues and I am looking forward to what we can achieve together,” commented Will Gardiner, Chief Executive Officer of Drax Group (photo courtesy Drax).

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