Bluefield Solar Income Agrees To PS548 Million Cash Offer From Drax
The title of this post is the same as this article from A J Bell.
These two paragraphs give more details of the deal.
Bluefield Solar Income Fund Ltd on Monday said it had agreed to a £548 million cash offer from Drax Group PLC, which implies an enterprise value of £1.08 billion.
The solar-power focused investment firm has received a bid from Drax Smart Generation Holdco Ltd, which is wholly-owned by Selby, North Yorkshire-based electricity generator Drax. Both firms are members of the FTSE250 index.
I see this deal, to be very much like Centrica’s purchase of the Grain LNG Terminal, which I wrote about in Investment in Grain LNG.
I asked Google AI,”How Do Drax And Centrica Compare Financially?”, and received this answer.
Centrica and Drax have contrasting financial profiles:
Centrica operates on a much larger scale as a diversified retail and energy supply giant, generating £22.4 billion in annual revenue, while Drax is primarily an electricity generator focused on biomass, generating £5.4 billion.
Both companies face challenges from lower global energy prices.
I asked Google AI,”How Do Drax And Centrica Compare On Engineering And Research?”, and received this answer.
Drax and Centrica approach engineering and research from opposite ends of the energy sector: Drax is a mega-scale renewable generator focused on heavy industrial decarbonization, while Centrica focuses on consumer technology, smart energy networks, and servicing.
In addition, now that Centrica has bought the Grain LNG Terminal, Centrica seems to do a lot of LNG trading and storage and they appear to be moving into the bunkering of low-carbon fuels for shipping and have added a second site to Grain, with the acquisition of Severn power station at Newport.
Drax haven’t laid out their plans in detail yet.
These to paragraphs from Drax give a few hints.
Drax sees the purchase supporting growth in the UK renewables market, complementing its existing assets and facilitating £2 billion in incremental investment which Drax has planned for ‘flexible’ energy between 2025 and 2031.
Bluefield generated earnings before interest, tax, depreciation and amortisation of about £130 million in financial 2025, Drax noted, and has the potential ‘to grow Drax’s Ebitda from renewables, offering greater predictability and visibility of cash flows from a large operational portfolio’. This will reduce Drax’s earnings risk from grid connection delays, Drax added.
The last sentence seems to hint, that the deal comes with good connections to the grid, which given what you read about the problems of connecting must be a good thing.
Why Are Drax Building Open Cycle Gas Turbine Power Stations?
I asked Google AI, this question and received this answer.
Drax is building Open Cycle Gas Turbine (OCGT) power stations to provide rapid-response, back-up electricity when weather-dependent renewables (like wind and solar) cannot meet grid demand. This flexible generation stabilizes the UK grid, secures energy supplies, and supports the transition to a lower-carbon energy system.
Drax’s strategic move into OCGT is driven by several key factors:
Fast Start Capabilities: OCGT plants act like giant jet engines. They can go from a cold start to full power output in less than 20 minutes, making them ideal for meeting sudden spikes in electricity demand.
Back-up for Intermittent Renewables: Because output from wind and solar fluctuates with the weather, OCGT stations fill the generation gaps, ensuring continuous energy security without relying on older, dirtier coal power.
System Stability (Synchronous Compensation): Drax has equipped its new OCGTs (such as the Hirwaun Power Station) with a special clutch mechanism.
This allows the turbines to disconnect from the generator so the plants can act as “synchronous compensators.” In this mode, they provide crucial grid stabilization services—like inertia and voltage control—without burning gas.
Meeting Capacity Market Needs: These facilities primarily operate only during times of peak stress or low renewable output (e.g., 500 to 1,500 hours a year), providing a cost-effective support mechanism for the wider electricity system.
This Google Map shows Hirwaun Power Station.
Note.
- Hirwaun Power Station is indicated by the red arrow.
- Hirwaun Power Station is a 399 MW Open Cycle Gas Turbine Power Station.
- The A 465 is the Heads of the Valleys Road.
- Solar farms can be seen between the buildings.
Could Drax see commercial advantages to put the two systems together?
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