Drax Group plc (LSE:DRX) has agreed to acquire a 260MW battery energy storage portfolio from Apatura Limited for £157.2 million, marking a major step in expanding its flexible generation capacity in the UK. The projects, located across Scotland and England, each have a two-hour duration capacity and will be developed under staged payments between 2025 and 2028, linked to key construction milestones.
Completion of the first two acquisitions is expected in 2025, with the third project scheduled for early 2026. Construction on all three sites is planned to start later that year, and the first site is expected to become operational in 2027.
The agreement includes contractual safeguards against cost overruns and delays, with Apatura responsible for development management and assuming most of the construction risk. Drax has also secured a first-offer option on an additional eight projects totaling 289MW currently under development 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.”
The company added that the transaction is expected to generate returns “significantly ahead” of its Weighted Average Cost of Capital (WACC) and will be financed through cash and existing credit facilities.
Once fully operational, the new battery assets will complement Drax’s existing pumped storage, hydro, and gas turbine capacity. The combined FlexGen portfolio will reach 1.8GW of storage and flexible generation across nine sites, and together with Drax Power Station’s 2.6GW, will provide a total of 4.4GW of dispatchable power for the UK grid.
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