Drax says that it is still considering the sale of four 299MW open cycle gas turbine (OCGT) projects at sites in England and Wales, although three of them have provisionally secured 15-year Capacity Market agreements in the T-4 auction. The agreements are for the delivery period October 2024 to September 2039, at a price of £18/kW and are worth around £230M in that period.
The total capital cost of the projects is approximately £80-90M each, with a build time of around two years, Drax said. The fourth OCGT project participated in the auction but exited above the clearing price.
Drax said it was considering all options for the plants, which it said are intended to operate for short periods of time to meet specific system support needs. It said, “As the UK transitions towards a net zero economy, it will become increasingly dependent on wind generation and as such, fast response system support technologies such as these OCGTs are increasingly important to the energy system as a means to enable more wind to run more often and more securely.”
However, Drax said that it wanted to continued its focus on biomass strategy (it recently acquired a US biomass fuel company, see below) and the development of ‘negative emissions’ technology in the form of BioEnergy Carbon Capture and Storage (BECCS). In January 2021 Drax completed the sale of its CCGT assets and in March 2021 ends commercial coal generation.
Drax claimed that its remaining portfolio of sustainable biomass, pumped storage and hydro will be amongst the lowest carbon generation portfolios in Europe. It also won one-year Capacity Market agreements for 617MW of pumped storage and hydro assets worth around £10M between October 2024 to September 2025.