11 November 2002 – UK power producer Innogy, part of the E.ON group, is reported to be interested in buying back the buying Drax power plant, the UK’s largest power station, from its American owner AES Corp.

Innogy sold Drax to AES in 1999, when it was known as National Power, for £1,87bn ($2.98bn) and reports suggest that it might be willing to now offer £1bn.

Innogy has hired investment bank Schroder Salomon Smith Barney to manage the deal according to The Observer newspaper.

Drax has been sustained by long-term power contracts at prices well above the current rates but the decision by TXU Europe to terminate its contract has forced cash-strapped AES to consider the sale of its UK asset.

Termination of the 15-year TXU deal is set to hammer Drax’s earnings. The plant would have to start selling most its output into the spot market, where prices languish near record lows amid cut-throat competition and oversupply.