10 February 2016
DRAX GROUP PLC
(Symbol: DRX)
LEGAL CHALLENGE JUDGMENT
Drax today confirms that, following a High Court hearing, a judgment in relation to the Company's joint application with Infinis Energy for judicial review of the decision by HM Treasury to remove the Climate Change Levy (CCL) exemptions(1) without a reasonable and proportionate notice period has been made.
Whilst the High Court recognised in the judgment the merits of bringing the case, it has ruled against Drax and Infinis. Drax will now consider the judgment in detail.
Commenting on the outcome, Dorothy Thompson, Chief Executive of Drax said:
"Since their introduction in 2001, CCL exemptions such as Levy Exemption Certificates (LECs) have played a critical role supporting investment in a wide range of renewable technologies.
"In recognising our right to bring this case, the Court acknowledged that the removal of LECs was sudden and unheralded. However, it concluded that the government had not provided any specific and clear assurances on the continuation of exemptions and accordingly ruled in their favour.
"This hearing has raised a number of important issues regarding the way in which the government encourages private sector investment in UK energy infrastructure. The country needs new generating capacity and investment to help make this happen. We look forward to working with the government to achieve this."
Enquiries:
Drax Investor Relations: Mark Strafford
+44 (0) 1757 612 491
Media:
Drax External Communications: Andrew Brown
+44 (0) 1757 612 165
Website: www.drax.com
Note:
1. The CCL is a tax on UK business energy use intended to encourage energy efficiency, reduce carbon emissions and promote energy from renewable sources. The tax was implemented in 2001 and is collected from businesses by energy suppliers through energy bills to their business customers.
Customers were able to claim an exemption from the CCL if they bought electricity from certain qualifying renewable energy sources. Exempted renewable power was demonstrated by way of LECs, which were issued by Ofgem to generators for each MWh of qualifying renewable energy generated.
As part of the Budget on 8 July, the Chancellor announced the removal of the exemption from the CCL for electricity generated from renewable sources, with effect from 1 August 2015.
END
