Drax to sell gas assets, will use proceeds on biomass initiatives

By Erin Voegele | December 15, 2020

Drax Group plc on Dec. 15 announced it has reached an agreement to sell its natural gas-fueled power generation assets. The company said it will use the proceeds from the sale to develop its biomass supply chain and support its plans to become carbon negative by 2030.

The company has reached an agreement to sell Drax Generation Enterprise Ltd., which holds four combined cycle gas turbine (CCGT) power stations, to VPI Holding Ltd. for £193.3 million. The transaction is expected to close in January.

Drax acquired the CCGTs in December 2018. The company said the assets do not form part of its core flexible and renewable generation strategy.

A statement released by Drax indicates the company will continue to focus on its biomass strategy and system support services, including the development of a long-term future for sustainable biomass that is underpinned by biomass supply chain expansion and cost reduction. Drax will also continue to focus on bioenergy carbon capture and storage (BECCS).

"By focusing on our flexible and renewable generation activities in the U.K. we expect to deliver a further reduction in the Group's CO2 emissions, which should accelerate our ambition to become not just carbon neutral but carbon negative by 2030,” said Will Gardiner, CEO of Drax.

"By using carbon capture and storage with biomass (BECCS) at the power station in North Yorkshire to underpin the decarbonization of the wider Humber region, we believe we would be creating and supporting around 50,000 new jobs and delivering a green economic recovery in the North,” he added.

A full copy of the announcement can be downloaded from Drax’s website.