Highlights

  • Drax signs deal with Apatura to acquire three BESS projects totalling 260MW.
  • The projects are located across Scotland and Northern England, with operations starting from 2027.
  • Acquisition valued at GBP 157.2M, funded through cash and existing facilities

Drax Group plc (LSE:DRX) announced it has entered into an agreement with Apatura Limited to acquire three battery energy storage system (BESS) projects with a combined capacity of 260MW and two-hour duration.

Agreement with Apatura for 260MW BESS Portfolio

The total consideration amounts to GBP 157.2M, payable in stages between 2025 and 2028, based on construction milestones and project delivery by Apatura.

Completion of the acquisition of the first two projects is expected in 2025, with the third scheduled for completion in the first quarter of 2026. All three projects are located across Scotland and Northern England, with construction planned to commence in 2026 and the first site expected to become operational in 2027.

Expansion of Drax FlexGen Portfolio

The acquisition represents Drax’s first entry into short-duration battery storage within its FlexGen portfolio. The Group’s CEO, Will Gardiner, said:

“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.”

Gardiner added that the combination of BESS, long-duration storage, flexible generation, and renewable biomass will enable Drax to provide 4.4GW of dispatchable generation capacity to meet UK demand.

Strategic Fit with UK Energy Objectives

The portfolio aligns with Drax’s FlexGen strategy, adding fast-response, short-duration storage capabilities to its existing assets. The agreement includes contractual safeguards for cost overruns and delays, and the projects are expected to deliver returns significantly above the Group’s weighted average cost of capital.

In addition to the current acquisition, Drax also secured an option over a further eight sites (289MW) under development by Apatura, providing future growth opportunities within its storage portfolio.

Growing Role of Dispatchable Power

Drax highlighted that the UK’s increasing reliance on intermittent renewable generation, coupled with the retirement of thermal plants, underscores the need for more flexible and dispatchable power sources. The Group expects that once these BESS projects are operational, its FlexGen business will include 1.8GW of long and short-duration storage and flexible generation across nine UK sites. Combined with the 2.6GW capacity from Drax Power Station, this will bring its total dispatchable generation to approximately 4.4GW.

Share Performance

DRX’s shares trading at GBX 739.00 per share on 30 October 2025, Up by 0,96% from its previous close of GBX 732.0.