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Drax signs 200MW tolling agreement with Zenobē Coalburn
(Sharecast News) - Energy firm Drax said on Thursday that it had signed a tolling agreement with Zenobē Coalburn for 200MW of new battery energy storage capacity, strengthening its position in short‑duration, fast‑response power assets. Drax said the deal covers a 200MW, four‑hour battery system at Coalburn in Scotland and carries no upfront capital cost for the firm, with construction, maintenance and availability risk sitting with Zenobē.
The agreement runs for 15 years with no indexation and gives the FTSE 250-listed firm full operational control and dispatch rights. The project has a protected grid connection and is targeting commercial operation in 2028.
Drax said expected returns were significantly ahead of its weighted average cost of capital, adding that the contract aligned with its FlexGen strategy and complemented its existing investments in battery storage and asset optimisation.
Including the new agreement, Drax now has around 710MW of tolling contracts and physical BESS assets in place, alongside a pipeline of further opportunities.
Chief executive Will Gardiner said: "This new BESS tolling agreement, alongside our other recent tolling agreement and acquisitions of Flexitricity and three battery storage developments, shows we are building momentum in delivering a gigawatt-scale pipeline of battery storage opportunities.
"Drax sees the agreement as an attractive opportunity to provide additional BESS capacity for the group's FlexGen portfolio without an up-front capital payment, alongside physical ownership of BESS assets and the tolling agreement announced in January 2026"
As of 0825 GMT, Drax shares were down 1.59% at 865.50p.
Reporting by Iain Gilbert at Sharecast.com
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