Drax Group (LSE:DRX) has completed commissioning of Hirwaun Power Station in South Wales, taking commercial control of the first of three new gas turbine plants designed to provide flexible power generation and grid support services.
The Hirwaun facility is a 299-megawatt open-cycle gas turbine (OCGT), a type of power plant that can rapidly switch on and off to meet peaks in electricity demand.
All three OCGT plants combined will deliver approximately 900 megawatts of capacity once fully operational, with commissioning expected over the coming months.
The three plants will generate revenue through multiple streams: direct power sales at peak times, payments for system support services that stabilise the grid, and long-term contracts with the UK government's Capacity Market scheme worth over £260 million through to 2039.
OCGTs are designed to support the grid during periods when renewable energy generation, such as wind and solar, is low or unavailable, reducing the need for fossil fuel power plants and supporting the transition away from coal-fired generation.
The plants can also operate in a specialised mode without generating electricity, instead providing "inertia" and voltage control services that maintain grid stability as the network becomes increasingly reliant on variable renewables.
Siemens Energy, the German industrial equipment manufacturer, will handle day-to-day management and operation of the sites, whilst Drax will manage central dispatch and control.
The low fixed cost structure and centralised operational model are designed to maximise profitability across the fleet.
Will Gardiner, Drax's chief executive, said the commissioning represented a "landmark moment" for the company and part of its broader strategy to expand into flexible and renewable generation.
Drax has also begun initial investments in battery energy storage systems (BESS), which the company views as an attractive growth market alongside its gas turbine developments.
The company said it continues to explore opportunities to invest in flexible and renewable capacity that supports energy security whilst delivering returns to shareholders.