Energy group Drax Group has struck a 15-year tolling agreement with Zenob\u0113 Coalburn to secure 200MW (800MWh) of new battery energy storage capacity at Coalburn in Scotland, as it accelerates the build-out of its flexible generation portfolio.<\/p>\n
The deal will see Zenob\u0113 develop, construct and maintain the four-hour duration battery energy storage system (BESS), while Drax takes full operational control and dispatch rights once the project reaches commercial operation, targeted for 2028.<\/p>\n
Importantly for Drax, the structure requires no upfront capital investment. Construction, maintenance and availability risk will sit with Zenob\u0113, in return for a fixed annual tolling fee payable over the 15-year term from COD. The agreement is not indexed.<\/p>\n
Drax will retain all revenues from the asset, excluding capacity market and certain ancillary revenues, and said expected returns are \u201csignificantly ahead\u201d of its weighted average cost of capital.<\/p>\n
Chief executive Will Gardiner said the agreement reinforces the group\u2019s push into flexible generation technologies.<\/p>\n
\u201cFlexible generation technologies like battery storage support a secure, affordable and clean energy system for British homes and businesses,\u201d he said. \u201cThis new BESS tolling agreement, alongside our other recent tolling agreement and acquisitions of Flexitricity and three battery storage developments, shows we are building momentum in delivering a gigawatt-scale pipeline of battery storage opportunities.<\/p>\n
\u201cWe are focused on allocating capital to growth and value creation opportunities across our FlexGen portfolio that are aligned with the UK\u2019s energy needs, underpinned by strong cash generation and attractive returns for shareholders.\u201d<\/p>\n
The Coalburn project benefits from a protected grid connection and is subject to Zenob\u0113 taking a final investment decision, expected within six months, and achieving commercial operations.<\/p>\n
The agreement strengthens Drax\u2019s FlexGen strategy, adding short-duration, fast-response capability to its growing portfolio. It also complements its move into physical ownership of battery assets and optimisation services.<\/p>\n
<\/p>\n
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Energy group secures 800MWh Coalburn BESS through capital-light agreement with Zenob\u0113, strengthening FlexGen pipeline.<\/p>\n","protected":false},"author":271992,"featured_media":2150478,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53262],"coauthors":[137100],"class_list":["post-2150475","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-news","tag-featured-story","tag-scotland","tag-yorkshire"],"yoast_head":"\n