Drax in Talks for Iberdrola UK Assets

UK power producer Drax said September 24 that it is in talks with Iberdrola regarding "a potential acquisition of a UK portfolio of pumped storage, renewable hydro and gas-fired generation assets."

The citation of "a UK portfolio" suggests that Drax is not planning to acquire Iberdrola's entire UK gas/renewables asset portfolio. Iberdrola has declined to make any comment.

Drax said the discussions are preliminary in nature and there can be no certainty of any agreement or the timing or terms of any such agreement. It made the announcement following press coverage. Any potential acquisition would be fully debt funded and subject to shareholder approval said Drax, adding that a further announcement will be made as and when appropriate.

Iberdrola in 2017 had 2,000 MW gas-fired power plants and 2,666 MW of renewable generation (1,906 MW onshore and 194 offshore wind, and 566 MW hydro) in the UK.   The combined-cycle gas-fired (CCGT) units are: Damhead Creek on the Isle of Grain, Kent (805 MW), Rye House in Hertfordshire (715 MW), Shoreham in East Sussex (420 MW), and Lancashire (60 MW).

Drax late 2017 inked two deals - one a retail acquisition, the other a power plant acquisition - to increase its exposure to gas and renewables. It has historically been a coal-fired power producer.

Damhead Creek CCGT (Photo credit: Iberdrola)