Drax has announced that it is to spend £702m on Scottish Power’s entire portfolio of pumped storage, hyrdo and gas-fired generation.
Iberdrola, Scottish Power’s Spanish parent company, said that the move was part of its strategy to tackle climate change.
It also means that it would free the company up to invest in renewables and power grids throughout the UK.
Included in the deal are four gas power stations in England, two hydro schemes and a pumped storage plant in Scotland.
As a result, Scottish Power will produce all its power from its windfarms, many of which are offshore, including East Anglia One, which will be the world’s largest when it opens in 2020.
Keith Anderson, Scottish Power’s chief executive, said: “We are leaving carbon generation behind for a renewable future powered by cheaper green energy.”
The company’s customers will still be supplied from green and brown electricity, with some of it bought from other coal and gas power plant operators.
For Drax, the acquisition means that it will still be a key player when both solar and wind power output happens to be low.
Will Gardiner, chief executive of Drax Group, said: “As the system transitions towards renewable technologies, the demand for flexible, secure energy sources is set to grow. We believe there is a compelling logic in our move.”
He continued, saying that, “this acquisition makes great financial and strategic sense, delivering material value to our shareholders through long-term earnings and attractive returns.”
Kate Blagojevic, head of energy at Greenpeace UK, said: “Big utilities across Europe have been shedding their dirty fossil fuel infrastructure because it makes economic and environmental sense. This move by Scottish Power shows that the same maths adds up in the UK too.”
“Climate science could not be clearer that renewables are the future for powering our world. We need the government to give renewable energy industry its full backing rather than propping up the fossil fuel and nuclear companies.”