Business
Tolling agreement for 250MW (500MWh) of BESS
Drax Group plc has entered into a 10-year tolling agreement with West Burton C Limited for 250MW (500MWh) of new Battery Energy Storage Systems (BESS) capacity, with construction, maintenance, and availability risks borne by the developer, Fidra Energy. This capital-light arrangement provides Drax with full operational control and dispatch rights, retaining all revenues except Capacity Market revenues, and is expected to yield returns significantly above its Weighted Average Cost of Capital. The agreement, which is subject to Fidra's final investment decision by Q3 2026 and commercial operations by H2 2029, aligns with Drax's FlexGen strategy and the UK's energy security and decarbonisation objectives. Disclaimer*
About this update from Drax Group Plc
[{"type":"text","content":"\n\n30 January 2026\nDrax Group plc\n(\"Drax\"; \"The Group\"; Symbol: DRX)\n \nTolling agreement for 250MW (500MWh) of BESS\n \nDrax is pleased to announce that it has signed a tolling agreement with West Burton C Limited, a company owned by Fidra Energy (\"Fidra\", an independent Battery Energy Storage Systems \"BESS\" developer)(1), for 250MW (500MWh) of new BESS capacity.\n \nHighlights\n· Tolling agreement for 250MW 2-hour duration BESS at West Burton, England\n· No upfront capital cost - construction, maintenance and availability risk sits with Fidra\n· 10-year tolling agreement with annual payments indexed to UK CPI\n· Contract provides Drax with full operational control and dispatch rights\n· Protected grid connection, targeting a Commercial Operation Date (COD) in 2028\n· Expected returns significantly ahead of Drax's Weighted Average Cost of Capital(2)\n· Strong strategic fit\n· Aligned with Drax FlexGen strategy, adding short duration and fast response capability\n· Complements Drax investments in physical ownership of BESS and asset optimisation\n· Closely aligned with UK energy objectives of energy security and decarbonisation\n \nDrax Group 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.\n \n\"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.\"\n \nUnder the agreement Fidra will retain responsibility for construction, maintenance and availability of the asset during the contract period. In return Drax will pay a fixed annual tolling fee over the agreed term of 10 years from the COD, in return for full operational control and dispatch right...