Drax Inks Major 10-Year Deal to Bolster UK Grid with 250MW Battery Storage
In a significant move for the UK's energy storage sector, Drax Group has entered into a ten-year tolling agreement with Fidra Energy for a 250MW / 500MWh Battery Energy Storage System (BESS) at the West Burton site in Nottinghamshire.
The deal structures Fidra, owner of the West Burton C project, to handle the full construction, maintenance, and availability of the BESS asset. Drax, in return, will pay an annual fee linked to inflation, gaining full access to the system's market trading revenues while avoiding any upfront capital expenditure. Capacity Market payments will flow separately to Fidra.
For Drax, this represents a strategic, capital-efficient method to rapidly scale its FlexGen portfolio. The agreement complements the company's directly owned battery assets and follows recent acquisitions, including Flexitricity's optimisation platform and a 260MW pipeline from Apatura. The project is contingent on Fidra reaching a Final Investment Decision by Q3 2026, with a targeted commercial operation date in 2028.
"Agreements like this are crucial for building the resilient, flexible grid we need," said Drax Group CEO Will Gardiner. "It's a key step towards our ambition of developing a gigawatt-scale pipeline of storage, supporting both energy security and the transition to net zero."
The UK's push for a renewables-dominated grid has sharply increased the value of large-scale storage, which can balance intermittent wind and solar power. Analysts note that tolling agreements allow established utilities like Drax to secure capacity and market access without bearing construction risks, a model likely to be replicated as storage targets loom.
Industry Voices
Michael Thorne, Energy Analyst at Greenhill Advisors: "This is a textbook example of asset-light growth. Drax locks in significant storage capacity for revenue stacking in wholesale and balancing markets, while Fidra secures a long-term offtaker. It de-risks the project finance and accelerates deployment."
Sarah Chen, Director at the Clean Power Initiative: "Every new MW of storage is welcome, but let's not confuse activity with adequacy. A 250MW system coming online around 2029 is a drop in the ocean compared to the tens of GWs needed this decade. These are positive corporate steps, but they highlight the staggering scale of the national challenge and the lack of a truly strategic, government-led storage policy."
David Reeves, Former Grid Operator: "Practical, sensible deal. The tolling model works. My only question is the timeline—2028/29 feels late given current grid constraints. We need this capacity yesterday."
Priya Sharma, Sustainability Lead at an ESG Fund: "It's encouraging to see traditional generators like Drax pivot decisively. This deal integrates storage with their existing generation and trading expertise, which is exactly the kind of hybrid model that will deliver both reliability and decarbonisation."