Drax signs tolling agreement for 250MW battery storage in England

30 Jan Drax signs tolling agreement for 250MW battery storage in England

(Oilandgaspress) -] Drax announced that it has signed a tolling agreement with West Burton C Limited, a company owned by Fidra Energy (“Fidra”, an independent Battery Energy Storage Systems “BESS” developer)(1), for 250MW (500MWh) of new BESS capacity.

Under the agreement Fidra will retain responsibility for construction, maintenance and availability of the asset during the contract period. In return Drax will pay a fixed annual tolling fee over the agreed term of 10 years from the COD, in return for full operational control and dispatch rights, retaining all revenues (excluding Capacity Market revenues).

Drax sees the agreement as a capital light opportunity to provide additional BESS capacity for the Group’s FlexGen portfolio, alongside physical ownership of BESS assets(3).

The agreement is subject to Fidra taking a final investment decision on the project by Q3 2026 and commercial operations by H2 2029.

Highlights
Tolling agreement for 250MW 2-hour duration BESS at West Burton, England
No upfront capital cost – construction, maintenance and availability risk sits with Fidra
10-year tolling agreement with annual payments indexed to UK CPI
Contract provides Drax with full operational control and dispatch rights
Protected grid connection, targeting a Commercial Operation Date (COD) in 2028
Expected returns significantly ahead of Drax’s Weighted Average Cost of Capital(2)
Strong strategic fit
Aligned with Drax FlexGen strategy, adding short duration and fast response capability
Complements Drax investments in physical ownership of BESS and asset optimisation
Closely aligned with UK energy objectives of energy security and decarbonisation

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