Drax Group has announced a landmark £157.2 million acquisition of three battery energy storage system projects from renewable energy developer Apatura Limited, marking the power generator’s strategic entry into short-duration storage technology.
The deal encompasses 260MW of two-hour duration battery storage capacity across three sites in Scotland and Northern England, representing a significant milestone in the UK’s efforts to strengthen grid resilience as the nation accelerates its renewable energy transition.
Strategic Expansion of FlexGen Portfolio
Drax will make staged payments between 2025 and 2028, with completion of the first two project acquisitions expected in 2025 and the third in the first quarter of 2026. The portfolio includes two sites in Scotland—Neilston in East Renfrewshire and East Kilbride in Lanarkshire—and one in Marfleet, Hull.
Will Gardiner, CEO of Drax Group, emphasized the strategic importance of the investment: “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.”
Gardiner added that 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.
Construction Timeline and Risk Management
Construction on all three sites is expected to commence in 2026, with the first site in Scotland due to be operational in 2027, and the second and third sites expected to commence operations thereafter.
In a notable aspect of the agreement, Apatura will manage the development of the projects and bear the majority of the construction risk, including cost overruns and delays, which is reflected in the fixed cash consideration and contractual protections.
Growth Options and Future Expansion
The transaction includes an important growth component. Linked to the deal, Drax has agreed to a right of first offer option over a further eight sites totalling 289MW being developed by Apatura, creating optionality for continued development of the FlexGen portfolio.
Apatura’s Scottish Energy Leadership
Giles Hanglin, CEO of Apatura, highlighted the strategic alignment: “This deal represents a strong strategic fit for Drax and Apatura, who are both closely aligned with UK energy objectives of energy security and decarbonisation.”
Apatura is responsible for Scotland’s largest energy storage pipeline, with 10GW of renewable energy capacity in development. The York-based developer has successfully secured over 1GW of approved or operational battery energy storage capacity, positioning itself as a major player in the UK’s energy storage sector.
Transforming UK Energy Infrastructure
Once the battery storage assets are operational, Drax’s FlexGen portfolio will comprise 1.8GW of long and short duration storage and flexible generation across nine sites in England, Scotland and Wales. Combined with the 2.6GW from Drax Power Station, this will bring the group’s total dispatchable generation capacity to 4.4GW.
The Group’s FlexGen business currently comprises long duration pumped storage, hydro and Open Cycle Gas Turbines, but not short duration battery energy storage with fast response capabilities. Drax believes that two-hour battery storage provides an attractive entry point into the short duration storage space and will be complementary to the Group’s existing FlexGen business, allowing it to provide a wider range of system support services.
Supporting the UK’s Energy Transition
Drax believes that the retirement of older thermal generation assets and increased reliance on intermittent renewables, as well as an increase in power demand, will drive a growing need for dispatchable power and system support services.
James Perry, CFO of Apatura, emphasized the partnership’s significance: “Aligning with an organisation like Drax means we’re propelling the energy transition forward.”
The acquisition comes at a critical time for the UK energy sector, as the nation works to balance growing electricity demand with ambitious decarbonization targets while maintaining grid stability and energy security. Battery energy storage systems will play a crucial role in managing intermittent renewable generation and providing rapid response capabilities to support grid stability.
Following the announcement, Drax shares rose 1.8% to 745.50 pence in London trading, with shares 19% higher than a year ago.
