Drax commissions Hirwuan Power Station in South Wales

(Sharecast News) - Drax said on Friday that it had completed commissioning of Hirwaun Power Station in South Wales, the first of three 299MW open cycle gas turbine plants it is developing in England and Wales.

The FTSE 250 power generation group said it had now assumed commercial control of Hirwaun from developer Metlen Energy & Metals.

Drax said the three OCGT plants would provide combined capacity of about 900MW once fully commissioned.

They would be remunerated through a combination of peak power generation, system support services and long-term index-linked Capacity Market agreements.

The Capacity Market agreements run to 2039 and are worth more than £260m in revenue.

Chief executive Will Gardiner said commissioning the first OCGT plant was a "landmark moment" for Drax.

"The energy transition is creating opportunities for us to invest and grow our business in line with the country's energy needs," he said.

Gardiner said that alongside OCGT developments, Drax had made initial investments in battery energy storage systems, which it viewed as an attractive market.

"We are continuing to explore options to invest in flexible and renewable energy, supporting energy security, creating value for stakeholders and attractive returns for shareholders in line with our capital allocation policy," he added.

Drax said the OCGT sites benefit from a low fixed cost base, with operation and dispatch managed centrally by Drax and day-to-day site management handled by Siemens Energy.

The company said the flexibility of OCGTs allows them to switch on and off quickly during periods of high demand, supporting the increased use of intermittent renewables across the UK power system and helping energy security.

The plants have also been built with a clutch mechanism between the turbine and generator, enabling them to operate as synchronous compensators.

Drax said this would allow them to provide non-generation services such as inertia and voltage control without using the gas turbine.

Drax said that as the UK power market evolves, with more renewables and a greater focus on energy security, it expects demand for such services to increase.

At 0816 BST, shares in Drax Group were up 0.62% at 813p.

Reporting by Josh White for Sharecast.com.

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