Drax Group Signs 10-Year Agreement for 250MW Battery Storage in England

Drax's Strategic Move in Battery Storage

Jan 30 (Reuters) - British power firm Drax Group said on Friday it has signed a 10-year tolling agreement for a 250-megawatt battery energy storage system (BESS) with Fidra Energy, as the company accelerates its broader battery storage business.

Details of the Tolling Agreement

The deal, which is indexed to UK inflation, requires Drax to pay a fixed annual tolling fee over the 10-year term. Fidra is expected to take a final investment decision on the project by the third quarter of 2026, and begin operations in the second half of 2029.

Impact on UK Energy Sector

Under the agreement, Drax will toll the two-hour battery storage asset at West Burton in Nottinghamshire, with no upfront capital cost as construction, maintenance, and availability risk remain with Fidra.

A tolling agreement lets one company operate another party's energy asset for a fee, without owning or building it.

"Flexible Generation technologies like battery storage will support a secure, affordable and clean energy system for British homes and businesses," said Drax Group CEO Will Gardiner in a statement.

"Our first BESS tolling agreement is an important step in our ambition for a gigawatt scale pipeline of battery storage opportunities," said Gardiner.

(Reporting by Ankita Bora in Bengaluru; Editing by Mrigank Dhaniwala and Rashmi Aich)