The £702m energy deal that is good news for the environment - energy storage companies
Britain's two largest energy companies bought and sold each other's assets in a £ 702 deal, marking one of the biggest changes in the industryups in years.
Power of Scotland, one of them
Home energy suppliers, known as the "six big", are selling eight gas and hydro-power plants to Drax.
The deal made the Scottish Power owned by Spanish Iberia de la the first vertical-
Integrated Energy UK
In other words, it can generate electricity and sell it to families and businesses.
Move completely from coal and gas
Thermal power generation of wind power.
The company has shut down all the coal.
Power plants have been burning for the past decade, so selling the remaining gas and hydro-power plants means that all electricity will now be generated by wind power.
This is a feather from Scottish Electric, and when its East Anglia 1 facility is completed in 2020, it will be able to claim to operate the world's largest offshore wind farm.
This is not to say that 100% of the energy consumed by households and businesses in Scotland's electricity supply will come from renewable energy.
Clearly, customers who buy natural gas from the company will still buy fossil fuels, and in the days to come the wind will not blow and the electricity will have to come back --
Provide sources for the state grid.
This is where Drax is interested in these assets.
Over the past decade, Drax, near Selby, North Yorkshire, has been on a transformative journey like the Scottish authority.
Once the largest coal company in Europe.
It has been converting four of the six units into biomass, burning wood particles instead of coal.
This is ahead of the UK's expected shift. off of coal-
In 2025, although Drax has been seeking to convert its last two units into natural gas-
Not biomass.
Along with the new carbon capture and storage project that Drax has been working on, this will make it a carbon-negative.
As a result, some may be surprised to see it buying these assets, including: Damhead Creek Power Station in Kent;
Rye House factory in Harford County
Shoreham power station in Sussex
Cruachan is a huge facility built on a hill near Loch Lomond in the Scottish Highlands, pumping water between two reservoirs through turbines to generate electricity when there is an oversupply
Renewable energy can be intermittent, as mentioned above, which can explain Drax's interest.
In this case, the back
As Will Gardiner, Drax's chief executive, pointed out, there is a need to increase the supply of energy: "This is a critical moment in the UK power industry.
"As the system transitions to renewable technologies, demand for flexible, secure energy will grow.
"We believe that there is a compelling logic in our actions to add more flexible power to our products and accelerate our strategic vision to deliver lowercarbon, lower-
Future energy costs in the UK.
However, this is not the only reason Drax is keen to buy these assets.
Britain will shut down its final coal supply for two years.
Coal-fired power generation capacity, Drax government subsidies for coal
A combustion device that converts it into biomass
The company was worth 730 last year.
It could undermine its profitability.
Investors will wonder if Drax has paid too much for these assets, or if Scottish electricity sold them for less.
However, when the news that the two were negotiating leaked last month, the price was at the bottom of the discussion interval, while the shares of Drax and Iberdrola both rose sharply this morning.
Both S & P Global and Fitch's rating agencies say they don't think the deal will have any concerns about Drax's credibility.
So for Scottish Power, the agreement marks its shift to 100% renewable power generation, while for Drax it marks a further diversity away from coal and government subsidies.
Overall, this marks another small step in Britain's transformation from dirty coal --
Renewable energy generation.
In other European countries, especially Germany, Poland and the Czech Republic, where the most polluted coal is still being produced and burned in large quantities, it is good news for the UK.