Companies

Description

Drax Group PLC is a power generation business. The principal downstream enterprises are based in the UK and include Drax Power Limited, which runs a biomass and coal fueled power station, Drax power station, near Selby in North Yorkshire. The Group also runs an international biomass supply chain business. The company is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

In 2021, the company was taken out of the S&P Global Clean Energy Index, as it no longer is considered to be a "clean" energy company by the S&P.

History

In 1990, the electricity industry of England and Wales was privatised under the Electricity Act 1989. Three generating companies and 12 regional electricity companies were created. As a result of privatisation, Drax Power Station came under the ownership of National Power, one of the newly formed generating companies. Over the years that followed privatisation, the map of the industry changed dramatically. One significant change was the emergence of vertically integrated companies, combining generation, distribution and supply interests. In certain cases, it became necessary for generation assets to be divested, and so in 1999 Drax Power Station was acquired by the US-based AES Corporation for £1.87 billion (US$3 billion). A partial re-financing of Drax was completed in 2000, with £400 million of senior bonds being issued by AES Drax Holdings, and £267 million of subordinated debt issued by AES Drax Energy.

Increased competition, over-capacity and new trading arrangements contributed to a significant drop in wholesale electricity prices, which hit an all-time low in 2002. Many companies experienced financial problems, and Drax Power Station's major customer went into administration, triggering financial difficulties for Drax. Following a series of standstill agreements with its creditors, the AES Corporation and Drax parted company in August 2003.[6] During the restructuring, a number of bids were received from companies wishing to take a stake in the ownership of Drax, but creditors voted overwhelmingly to retain their interest in Drax. In December 2003, the restructuring was completed and Drax came under the ownership of a number of financial institutions.

Almost exactly two years later, on 15 December 2005, Drax underwent a re-financing and shares in Drax Group plc were listed on the London Stock Exchange for the first time.

In 2009, Drax Group acquired Haven Power  – enabling it to sell electricity directly. In 2015, the Group acquired Billington Bioenergy, specialists in providing sustainable biomass pellets for domestic energy systems.

In 2016, Drax Group acquired Opus Energy for £340 million funded by a new acquisition debt facility of up to £375 million. In October 2017, Drax sold Billington Bioenergy for £2 million to an AIM-listed energy company called Aggregated Micro Power Holdings.

On 16 October 2018, Drax Group announced that it had agreed to acquire Scottish Power's portfolio of pumped storage, hydro and gas-fired generation for £702 million in cash from Iberdrola, subject to shareholder approval. Drax confirmed that approval had been granted on 1 January 2019. The acquisition brings with it Cruachan pumped storage power station, Rye House power station, Damhead Creek power station, Galloway hydro-electric power scheme, Lanark Hydro Electric Scheme, Shoreham Power Station and Blackburn Mill power station.

On 15 December 2020, Drax Group announced the sale of Rye House, Damhead Creek, Shoreham and Blackburn Mill to VPI Holdings for £193.3m.

On 13 April 2021, Drax announced that it had completed the acquisition of Pinnacle Renewable Energy Inc.

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