Drax Group plc secures UK Government Energy Contract until March 2031 (LON:DRX)

Drax Group plc (LON:DRX) has announced a low-carbon dispatchable CfD agreement.

Highlights

·    Heads of terms agreed with UK Gov. for operation of Drax Power Station (DPS) post 2027

–  CfD scheme with a strike price of £113/MWh (2012) applied to all four biomass units

–  c.6TWh pa generation collar with flexible operation to support high and low demand periods

–  Contract period Apr-27 to Mar-31

–  Baringa estimate £1.6-3.1 billion of saving to consumers(1)

·    Targeting average Adj. EBITDA of £100-200 million pa from DPS over agreement period

·    Continuing to target >£500 million Adj. EBITDA pa post 2027 from FlexGen and Pellet Prod.

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