Global investment manager Quinbrook has sold its energy optimization business Flexitricity to Drax Group.
The £42 million transaction values Flexitricity at £36 million, with a further £6 million covering estimated net working capital and cash adjustment.
Completing the acquisition will require UK government approval and UK energy regulator Ofgem to review the transaction, but these are the only remaining conditions to completion.
Quinbrook acquired Flexitricity in 2020 for £15.2 millionat which point Flexitricity had a contracted portfolio of 540MW of flexible energy assets.
Quinbrook said it has since overseen the doubling of the company’s portfolio to approximately 1.3 GW of distributed capacity. The investment manager also owns a UK-based optimization and trading platform Habitat Energy Limited, which it acquired a year after Flexitricity.
That deal raised some eyebrows because it was an apparent duplication, but Habitat has a broader scope and operates in the US and Australian markets, as well as the UK.
Flexitricity provides optimization and route-to-market services to asset owners through its proprietary control platform that enables participation in the wholesale energy, balancing and ancillary services markets, primarily in the United Kingdom.
It provides both on- and off-the-meter solutions for grid-scale assets, as well as demand response services for more than 900 MW of operational assets, primarily battery energy storage systems (BESS), gas peaking, renewables and demand response.
That list of assets is very similar to Drax’s focus areas, which include the FlexGen portfolio of long-life pumped storage, hydropower and open-cycle gas turbines (OCGTs), and three recently acquired BESS in Great Britain.
Drax BESS activity
Drax said the acquisition of Flexitricity supports its intention to develop a gigawatt pipeline from BESS, encompassing both physical assets and optimization capabilities for third-party assets, offering route-to-market (RTM), floor and toll structures.
Through its Drax Energy Solutions business, the company already supplies RTM for approximately 800 MW of third-party embedded renewable assets. A large part of the activities takes place in Great Britain, so the purchase of Flexitricity also makes sense in that respect.
Drax, a legacy fossil fuel energy producer that has now focused primarily on biomass, is newer to the BESS market than Quinbrook. In December 2024, it established a BESS-focused subsidiary, Drax BESS Holdco (Drax Bidco), which only started trading when it served as a vehicle for Drax to make a profit. £200m cash offer to acquire the entire share capital of listed Harmony Energy Income Trust (HEIT).
Drax said ownership of HEIT provided a “compelling opportunity” to add operational BESS assets to its FlexGen portfolio, but later withdrew its offer when a higher competing offer was made.
At one point the company was considering installing up to 200 MW of BESS in addition to gas generation at a coal-fired power plant it operated.
It submitted a planning application for the scheme in 2017, but both coal units were closed and not converted in 2021, and the proposed battery was also not built. Now one of the former coal-fired power stations runs on imported biomass, for which the company receives large subsidies from the past.
The company’s storage business has historically been in pumped hydro storage technology (another area in which Quinbrook is a colleague), but with its decision not to bid for the ceiling and floor support mechanism for long-term energy storage (LDES), announced in May last year, Drax appears to be shifting focus.
It quoted rising costs and unclear ‘recoverability of capital’ in that decisiondiscussed with our sister site, Energy storage.news.
