NORTH Yorkshire power station operator Drax has announced the sale of its wood pellet business for £2 million.

Billington Bioenergy (BBE), a distributor of wood pellets in the UK heating market, has been acquired by AIM-listed energy company Aggregated Micro Power Holdings (AMPH).

AMPH specialises in the sale of wood fuels and the development of distributed energy assets, including biomass boilers and battery storage.

Billingtons supplies around 40,000 tonnes of wood pellet to commercial customers per annum, has four depots, a head office in Liverpool and employs 34 staff.

The deal is worth £2 million, comprised of £1.6 million worth of shares in AMPH and £400,000 in cash.

Through its shareholding in AMPH, Drax will retain an interest in the UK heating market, while gaining exposure to the development of small-scale distributed energy assets.

Dorothy Thompson, chief executive of Drax Group, said: “We are pleased with the sale of BBE and our investment in AMPH.

“With their leadership in the UK wood pellet heating market, we believe they are the right partner to take forward and grow BBE, while supporting the UK’s transition to a low carbon economy.”

Richard Burrell, chief executive of Aggregated Micro Power Holdings, said: “We are delighted Drax has become a long term investor in AMP and we look forward to working with Drax on a range of development projects which should help to expand our assets under management in the distributed energy space. Billingtons has built a strong and well-regarded business in the wood pellet market in England over the last ten years and is an excellent fit with Forest Fuels.”