A NORTH Yorkshire-based energy giant has announced two important acquisition moves.

The Drax Group revealed the proposed acquisition of Opus Energy Group Ltd for £340 million and the purchase of four open cycle gas turbine (OCGT) development projects.

Opus is a well-established retail company supplying energy to the small and medium-sized business market, whose acquisition forms part of Drax’s strategic plans to move to diversified, higher-quality long-term earnings.

The OCGT move reflects the changing nature of the energy industry, and particularly the move away from coal-powered electricity, with the gas-fired plants able to rapidly come on stream during periods of peak demand which sources such as solar and wind power might not be able to meet.

The massive Drax power station near Selby is going through the process of switching from coal generation to using biomass in the form of wood pellets.

Andy Koss, chief executive of Drax Power, said Opus would complement the company’s existing retail business Haven, which usually supplied larger and more commercial ventures , but Opus tended to operate with higher margins.

He added: “Gas-fired power stations have a very rapid response and are able to respond to times of peak demand,” saying they could go from cold to full power in ten minutes.

“With increasing use of intermittent technologies such as wind and solar in lower-carbon energy production and our experience we see this as a very natural fit for our existing business,” he said. “We building a generation portfolio that we think meets the energy requirements of the future.”

Mr Koss said coal needed to “come off the system by 2025” and the Government supported new gas energy generation. Most people had recognised there was a need for technology like the gas generators they had purchased to “balance the system”.

Dorothy Thompson, Drax Group chief executive, said the proposed acquisition of Opus created “a strong and competitive presence complementing our existing Haven Power offer” and the four OCGT development projects would “play an important role in helping government meet their ambition of new gas generation, reducing carbon emissions, forcing more coal off the system, providing additional system support to ‘plug the gaps’ created by intermittent renewables and boosting security of supply.

“With the right conditions, we can do even more, converting further units at Drax to use sustainable biomass in place of coal. This is the fastest and most reliable way to support the UK’s decarbonisation targets, whilst minimising the cost to households and businesses.”

The Opus board said: “We are pleased to announce today that the shareholders of Opus Energy have unanimously agreed to accept Drax’s offer to acquire the whole of the Opus group subject to certain completion conditions.

“Since its inception in 2002, the company has grown to become one of the UK’s biggest suppliers of energy to business customers, with a market share of 8.3 per cent of non-domestic business supply and over 295,000 customer sites supplied.

“The shareholders believe that the offer from Drax provides a unique opportunity which is strategically compelling for the Opus Energy group and which will allow the business to move forward to its next stage of growth.”