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Drax has confirmed it is in talks with Iberdrola to buy a portfolio of gas, hydro and pumped storage plants from its UK subsidiary Scottish Power.

The confirmation follows reports in The Telegraph over the weekend that it was seeking to purchase the assets in a bid to end its reliance on biomass subsidies.

“The discussions are preliminary in nature and there can be no certainty of any agreement or the timing or terms of any such agreement,” said a spokesperson for Drax.

“Any potential acquisition would be fully debt funded and subject to shareholder approval. A further announcement will be made as and when appropriate.”

In August, Drax completed the conversion of the fourth of six generating units at its Yorkshire power station from coal to biomass.

The company intends to convert the two remaining coal units into combined-cycle gas turbines and applied for planning permission for the project in May.