Capacity market agreements provisionally secured by Drax
North Yorkshire-based energy company Drax has provisionally secured agreements to provide 617MW of capacity (de-rated 582MW) principally from its pumped storage and hydro assets.
The agreements are for the delivery period October 2024 to September 2025, at a price of £18/kW and are worth around £10m in that period.
These are in addition to existing agreements which extend to September 2024.
Drax has also provisionally secured 15-year agreements for three new 299MW (de-rated 284MW) Open Cycle Gas Turbine (OCGT) projects at sites in England and Wales.
The agreements are for the delivery period October 2024 to September 2039, at a price of £18/kW and are worth around £230m over this period.
A Drax spokesman added: “These assets are intended to operate for short periods of time to meet specific system support needs.
“As the UK transitions towards a net zero economy, it will become increasingly dependent on wind generation and as such, fast response system support technologies such as these OCGTs are increasingly important to the energy system as a means to enable more wind to run more often and more securely.
“The total capital cost of these projects is approximately £80-90m each, with a build time of around two years.”
Drax will now evaluate options for all four OCGT projects including their potential sale.
In December 2019 the business announced its ambition to become a carbon negative company by 2030 using BioEnergy Carbon Capture and Storage (BECCS).
In January 2021 it completed the sale of its Combined Cycle Gas Generation (CCGT) assets and in March 2021 ends commercial coal generation.
Drax says it believes its remaining portfolio of sustainable biomass, pumped storage and hydro will be amongst the lowest carbon generation portfolios in Europe.
