Scottish Power is set to become the first major UK energy supplier to be powered 100 per cent by renewable energy after it today announced a £702m sale of its gas and hydro stations to Drax.
Scottish Power had previously closed its coal powered facilities and today agreed to sell a 2,566 megawatt portfolio to Drax consisting of gas, hydro and pumped storage assets.
Chief executive of Scottish Power Keith Anderson said: “This is a pivotal shift for Scottish Power as we realise a long-term ambition. We are leaving carbon generation behind for a renewable future powered by cheaper green energy. We have closed coal, sold gas and built enough wind to power 1.2m homes.”
The company said it was investing £5.2bn in UK renewable energy over four years with the aim of more than doubling its existing two gigawatt capacity.
The sale is part of Spanish parent company Iberdrola’s goal to reduce emissions by 30 per cent by 2020 and be carbon neutral by 2050.
Chief executive of Drax Will Gardiner said: "We believe there is a compelling logic in our move to add further flexible sources of power to our offering, accelerating our strategic vision to deliver a lower-carbon, lower-cost energy future for the UK."
Drax has agreed a £725m acquisition bridge facility to finance the deal which is subject to Drax shareholder approval.
JP Morgan Cazenove is acting as financial adviser and joint corporate broker to Drax and Royal Bank of Canada is joint corporate broker.
Drax shares rose 3.7 per cent in morning trading.