ScottishPower has today announced it is to become a 100 per cent renewable energy operator, making it the first of the 'Big Six' to quit fossil fuels.

The energy giant today confirmed it has agreed to sell its 2,566MW gas generation business to Drax Smart Generation in a cash deal worth £702m.

The company said the move, subject to Drax shareholder approval, makes it the first "first vertically integrated UK energy company to exit coal and gas generation".

"Energy companies must be part of the solution to climate change," said Ignacio Galán, chairman and chief executive of ScottishPower parent company Iberdrola. "[We are] acting now to cut carbon emissions 30 per cent by 2020 and be carbon neutral by 2050. The sale of these generation assets is consistent with our strategy."

Keith Anderson, chief executive of ScottishPower, said the deal represented a "a pivotal shift" for the company.

"We are leaving carbon generation behind for a renewable future powered by cheaper green energy," he added. "We have closed coal, sold gas and built enough wind to power 1.2 million homes."

He added that the move would help drive a multi-million pound renewable energy investment drive, with the company planning to invest £5.2bn over the next four years as it seeks to more than double its existing 2GW of wind energy capacity.

"Every working day we are investing over £4m to deliver cleaner, smarter power for customers," Anderson said. "From today we can focus solely on making energy generation cheaper, cutting carbon quicker, building smart grids and connecting customers to renewable electric future for transportation and heating."

The deal will also support Drax's plans to reduce its reliance on coal power and shift towards lower carbon gas and biomass. "As the system transitions towards renewable technologies, the demand for flexible, secure energy sources is set to grow," said Will Gardiner, CEO of Drax Group. "We believe there is a compelling logic in our move to add further flexible sources of power to our offering, accelerating our strategic vision to deliver a lower-carbon, lower-cost energy future for the UK."