UK power generator Drax has signed a tolling agreement with West Burton C to gain full operational control and dispatch rights for a 250MW/500MWh battery energy storage system (BESS) in the UK.
West Burton C, a subsidiary of UK battery business Fidra Energy, will reach a final investment decision on the BESS project by the third quarter of this year and, should the project go ahead, the company expects to begin commercial operations at the facility in 2028.
Once operations begin, Drax will pay a fixed annual tolling fee for ten years, indexed to the UK Consumer Prices Index (CPI), to gain operational control and dispatch rights at the 2-hour project. Drax will retain any revenues from the project, save for Capacity Market (CM) revenues.
“Our first BESS tolling agreement is an important step in our ambition for a gigawatt scale pipeline of battery storage opportunities, alongside our recent acquisitions of Flexitricity and three battery storage developments,” said Drax CEO Will Gardiner, making reference to Drax’s purchase of Flexitricity last week and the acquisition of three BESS projects from Apatura last year.
These two deals cost Drax £199 million in total, and while the company did not specify the finances involved in the West Burton C tolling agreement, all three represent a significant investment in the UK battery sector. Not all of Drax’s investments in the space have been successful however, having withdrawn a £200 million offer for the Harmony Energy Income Trust (HEIT), which acquires ready-to-build BESS assets, made in March last year.
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