Drax Group to acquire elements of Scottish Power portfolio for £702m
Drax Group is acquiring Scottish Power’s portfolio of pumped storage, hydro and gas-fired generation assets for £702m from Spanish utility company Iberdrola.
Drax, which operates the UK’s biggest power station in Yorkshire, confirmed the deal this morning (October 16).
The assets consists of Cruachan pumped storage hydro; run-of-river hydro locations in Galloway and Lanark; a biomass-from-waste facility in Daldowie; and four CCGT(2) stations, at Damhead Creek, Blackburn Mill, Rye House and Shoreham.
The portfolio is forecast to generate an EBITDA of between £90m and £110m against gross profits from £155m to £175m.
According to Drax, the acquisition represents a significant expansion of its flexible, low-carbon and renewable generation model.
Will Gardiner, CEO at Drax Group, said: “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.”
He continued: “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.”
The acquisition follows news of a project to pilot robot technology that could transform some of Drax’s key operations.
Speaking further, Mr Gardiner said Drax is “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”.