The deal, valued at £340m ($429m), accompanies Drax’s £18.5m acquisition of four open cycle gas turbine projects totalling 1.2 GW.
Drax CEO Dorothy Thompson (pictured) cited diversification of both the firm’s generation mix and business strategy as motivators for the acquisitions, saying they “mark an important step in delivering our strategy, contributing to stronger, more predictable, long-term financial performance through greater diversification of the businesses, delivering more opportunities right across the markets in which we operate.”
Opus Energy supplies gas and electricity to around 130,000 small and medium-sized UK businesses, making it the top energy supplier outside the ‘big six’ utilities. Around 20 per cent of its power comes from renewable sources.
Ownership of Opus Energy could enable Drax to become the UK’s fifth biggest energy supplier to the business sector.
Drax is also aiming to enter the backup power market, noting in a statement that two of the four recently purchased gas-fired power projects participated in the UK’s capacity market auction this year.
And a third prong of the company’s strategy involves expanding its wood pellet production with a focus on export to growth markets.
Drax has long intended to move away from coal-fired power generation. Half of its eponymous 3960 MW coal-fired power plant in North Yorkshire has been converted to run on biomass, but in January a change in government support for conversion of the remaining units triggered a European Commission investigation into whether such support would violate state aid rules.