Drax buys supplier Opus Energy for £340m

Drax Group CEO Dorothy Thompson said the acquisitions mark "an important step in delivering our strategy"

Power station owner Drax is set to buy energy supplier Opus Energy for £340m as part of a strategy overhaul.

Drax Group, which runs the UK's largest power station in Selby, said the acquisition will create Britain's fifth biggest non-domestic energy retailer.

The company, which also announced the purchase of four gas turbine projects for £18.5m, is looking to move away from its coal burning legacy.

The announcement saw its shares rise by as much as 20%.

More stories from North Yorkshire

Drax wants to switch to direct energy supply and back-up power given that its station in North Yorkshire faces an uncertain future with coal plants forced to close by 2025.

Half of the plant has been converted to run on biomass, but the Government has not supported the conversion of the remaining coal units.

Drax Power Station in Selby is the largest in the UK

CEO of the Drax Group Dorothy Thompson said: "These initiatives mark an important step in delivering our strategy, contributing to stronger, more predictable, long-term, financial performance through greater diversification of the businesses, delivering more opportunities right across the markets in which we operate."

Gas and electricity supplier Opus Energy is the biggest provider to the business market, outside of the "Big Six" energy firms.

It was founded in 2002 and has around 870 staff across offices in Northampton, Oxford and Cardiff.

However, while Drax said the announcements would boost its future financial performance, it warned 2016 underlying earnings would be around the bottom end of City forecasts.

Energy experts at Jefferies said the moves signalled a "reinvention" for Drax.

A spokesman said: "This is the first time that the company is making a step into the small and medium-sized business retail market, therefore it remains to be seen whether Drax has the necessary expertise to manage this successfully."