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Drax Group PLC on Friday said it signed a tolling agreement with West Burton C Ltd, a company owned by Fidra Energy. The Selby, North Yorkshire-based electricity generator said the agreement is for 250 megawatt of new battery energy storage systems capacity at West Burton in England. Drax said the expected returns are ‘significantly’ ahead of its weighted average cost of capital. The company added that the deal ‘closely aligned’ with UK energy objectives of energy security and decarbonisation. Under the deal, Fidra will retain responsibility for construction, maintenance and availability of the asset during the contracted period, with Drax paying a fixed annual tolling fee over the agreed terms of 10 years from the commercial operation date. Drax said the agreement is subject to Fidra taking a final investment decision on the project by the third quarter of 2026, with commercial operations set to start by the second half of 2029. However, Drax said it targets a commercial operation date in 2028. Drax Chief Executive Officer Will Gardiner said: ‘Flexible generation technologies like battery storage will support a secure, affordable and clean energy system for British homes and businesses. Our first BESS tolling agreement is an important step in our ambition for a gigawatt scale pipeline of battery storage opportunities, alongside our recent acquisitions of Flexitricity and three battery storage developments. ‘We are working to create opportunities for growth and value creation in our FlexGen portfolio that are aligned to the UK’s energy needs, and are underpinned by strong cash generation, disciplined capital allocation and attractive returns for shareholders.’ Drax shares were 0.3% higher at 901.00 pence each on Friday morning in London. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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