Drax Group has announced the sale of four combined cycle gas turbine (CCGT) power stations to concentrate on renewables, including bioenergy with carbon capture and storage (BECCS).
The firm sold Drax Generation Enterprise Limited, which owns the stations (Damhead Creek 812 MW, Rye House 715 MW, Shoreham 420 MW, Blackburn Mill 60 MW), to VPI Holding for £193.3 million (€214 million), subject to customary adjustments. This includes £29 million (€32 million) of contingent consideration associated with the option to develop a new CCGT at Damhead Creek.
The CCGTs have performed well since Drax’s acquisition in December 2018, but do not form part of the firm’s core flexible and renewable generation strategy. Drax expects to realise a premium on sale and use the proceeds to develop its biomass supply chain and accelerate its ambition to become a carbon negative business by 2030.
“By focusing on our flexible and renewable generation activities in the UK, we expect to deliver a further reduction in the group’s CO2 emissions, which should accelerate our ambition to become not just carbon-neutral but carbon-negative by 2030,” said Drax CEO Will Gardiner.
“By using BECCS at the power station in North Yorkshire to underpin the decarbonisation of the wider Humber region, we believe we would be creating and supporting around 50,000 new jobs and delivering a green economic recovery in the North.
“We greatly value the contribution that our colleagues in gas generation have made to the group over the last two years. As we focus on a renewable and flexible portfolio, it is right that we divest these gas generation assets and in doing so, create value for our shareholders.”