North Yorkshire power generator Drax Group said on Thursday it has signed an agreement with Apatura Limited to acquire three battery energy storage system (BESS) projects across three sites in Scotland and England, which when fully commissioned will provide capacity totalling 260MW.
Drax said it will pay “a fixed amount of £157.2 million in staged payments between 2025 and 2028, reflecting construction milestones and including payments to Apatura linked to their delivery of the projects.”
It said completion of the acquisition of the first two projects is expected to occur in 2025 with completion of the third project expected in Q1 of 2026.
Apatura is a renewable energy and BESS developer founded in 2014 and is responsible for Scotland’s largest energy storage pipeline, with 10GW of renewable energy capacity in development.
The Apatura BESS sites are located at Marfleet in Hull, Neilston in East Renfrewshire, and East Kilbride. Both Marfleet and Neilston have all necessary planning permission while East Kilbride has a planning application pending.
Drax said it will not incur any cost for East Kilbride until the planning application is approved.
Construction on all three sites is expected to commence in 2026 with the first site operational in 2027. Drax said it also has an option over a further eight sites and 289MW being developed by Apatura.
Drax Group 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.
“In combination with our long duration energy storage, flexible generation and renewable generation from biomass, we will be able to provide 4.4GW of dispatchable generation to meet demand.
“As the UK’s network increases its reliance on intermittent renewables, more dispatchable and reliable generation will be required to help keep the lights on when the wind isn’t blowing or the sun isn’t shining.
“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.”