Power station owner Drax is set to purchase energy supplier Opus Energy in a £340m deal as part of the company’s strategy overhaul. Drax currently runs the largest power station in the UK in Selby, has stated that the acquisition of Opus Energy will create Britain’s fifth biggest non-domestic energy retailer. Currently Opus Energy provides the highest proportion of electricity and gas supply to businesses outside of the “Big Six” energy firms.
The company also announced a £18.5m purchase of four gas turbine projects that will have a total capacity of 1,200MW as Drax looks to move away from coal fired power generation. Drax is keen to switch from coal burning with the government enforcing a shutdown of coal plants by 2025, therefore explaining the move towards direct energy supply and backup power. Half of the plant has already been converted to run on biomass, although the government is not supporting the conversion of the remaining coal units. CEO of the Drax Group Dorothy Thompson said: “These initiatives mark an important step in delivering our strategy, contributing to stronger, more predictable, long-term, financial performance through greater diversification of the businesses, delivering more opportunities right across the markets in which we operate.”
Shares in Drax rose by 20% when the deal was announced on Tuesday, although warned that 2016 underlying earnings would be towards the bottom end of forecasts.