Drax signs second BESS tolling deal in three weeks: Now Zenobe, and notably different terms

Drax has signed another tolling agreement, less than three weeks after announcing a tolling deal with Fidra Energy for a 250 MW/500 MWh BESS in Nottinghamshire.

This tim, Drax’s second major contract is with Zenobe, for a potential 200 MW/800 MWh project at Coalburn in Scotland; less power, but a longer-duration capacity BESS.

The terms are different in some ways worth noting. The Fidra deal was a 10-year agreement, with annual payments indexed to CPI as a common type of inflation protection for the developer.

The Zenobe contract runs for 15 years and carries no indexation at all; Drax pays a fixed annual toll for a decade and a half, come what may. It’s an open question of if that is a better deal for Drax given a lack of change, or if Zenobe wanted the longer terms, or more simply that these agreements rarely look alike.

As with Fidra, there’s no upfront capital cost to Drax and therefore construction, maintenance and availability risk stays with Zenobe throughout. Drax noted that it gets full operational control and dispatch rights, keeping all revenues except capacity market and certain ancillary income. The project is targeting a commercial operation date in 2028, with the agreement conditional on Zenobe taking a final investment decision within six months. For the developer, tolling agreements shield exposure to merchant risk.

Between the Zenobe deal, the Fidra agreement, and its October 2025 acquisition of three Apatura BESS developments totalling 260 MW for £157.2 million (USD 211.8 million), Drax now has around 710 MW and roughly 1.8 GWh of contracted BESS capacity on the books, on top of Flexitricity, the UK-based optimization platform it acquired in January 2026 for £36 million (USD 48.5 million).

What they said

Drax Group Chief Executive Officer, Will Gardiner: “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. We are focused on allocating capital to growth and value creation opportunities across our FlexGen portfolio that are aligned with the UK’s energy needs, underpinned by strong cash generation and attractive returns for shareholders.”