UK energy firm confirms preliminary talks over deal with Spanish owner of Scottish Power

Drax is currently in talks with Spanish energy giant Iberdrola over the potential acquisition of a UK portfolio of pumped storage, renewable hydropower, and gas fired power facilities, the company confirmed in a statement over the weekend.

The UK energy firm said preliminary discussions are taking place with Iberdrola, which owns ScottishPower, over a potential deal for a number of power generation assets, although it emphasised “there can be no certainty of any agreement or the timing or terms of any such agreement”.

“Any potential acquisition would be fully debt funded and subject to shareholder approval,” a Drax statement said on Saturday. “A further announcement will be made as and when appropriate.”

BusinessGreen understands acquisition of additional gas power capacity from Iberdrola would not impact the company’s plans to develop its own gas power plants in the coming years, with any deal expected to complement its existing development strategy.

Drax operates the UK’s largest power station in North Yorkshire – and the UK’s single largest emitter of CO2 – where three coal units have now been converted run on biomass. One further unit is in the process of conversion, and two are still running on coal. The company is also working on a project aimed at capturing CO2 emissions from one of the biomass units, in a bid to prove that negative emissions technologies could be pioneered in the UK.

ScottishPower is currently developing a 700MW offshore wind farm in partnership with Vattenfall off the coast of East Anglia, in the first of four potential offshore wind projects in the region. It also operates several onshore wind farms in Scotland, in addition to other generation assets including a pumped hydro storage station in Cruachan, West Scotland, and 2GW of gas fired power capacity.

In other clean energy news, renewables developer SIMEC Atlantis today announced its interim financial results for the first half of 2018 showing a loss for the period of £9.1m, which the company said reflected “development build up”.

However, the company also secured a £20m equity fundraise in May and £5m five-year bond fundraise in June to secure working capital for the enlarged firm, which earlier this year saw the 220MW Uskmouth Power waste-to-energy project come under the Atlantis umbrella from parent company SIMEC Energy Holdings Ltd.

The first phase of the firm’s 6MW MeyGen tidal stream array off the coast of Scotland has now also officially entered into its 25 year operations phase, with the company adding that it “continues to pursue tidal stream projects globally and has submitted a strategic plan to the French government setting out plans to deliver 1GW of power by 2025 at le Raz Blanchard”.

The statement from SIMEC Atlantis said it “continues to move towards its transformation into a major global renewable energy provider”.