24 October 2019
Drax Group plc
("Drax" or the "Company"; Symbol:DRX)
Reapproval of UK Capacity Market
Drax notes the European Commission's decision regarding State aid approval of the UK Capacity Market. The decision confirms that the UK Capacity Market is compliant with State aid rules.
Following formal confirmation from the UK Government, Drax expects the Capacity Market to be re-instated shortly, with full retrospective payments made for the capacity provided. Capacity payments due to Drax for 2019 and since the suspension of the Capacity Market in 2018 are £75 million. Drax expects these to be included in 2019 EBITDA.
Drax expects the decision will allow future Capacity Market auctions to take place in early 2020. Drax retains options for new gas generation, which could be developed subject to appropriate clearing prices in future Capacity Market auctions.
A link to the European Commission's decision is provided below.
https://europa.eu/rapid/press-release_IP-19-6152_en.htm
Will Gardiner, Drax Group CEO said: "This is great news for the UK energy system. The capacity market helps to ensure Britain has the flexible and reliable power generating capacity needed to support the economy as it continues to decarbonise, keeping the lights on at the lowest cost for millions of homes and businesses.
"We will be prequalifying a number of Drax's flexible and reliable power stations, as well as some of our development projects, later this year with a view to participating in the Capacity Markets auctions in 2020."
Enquiries:
Drax Investor Relations: Mark Strafford
+44 (0) 1757 612 491
Media:
Drax External Communications: Matt Willey
+44 (0) 203 943 4306
Website: www.drax.com
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