31 January 2020
Drax Group plc
("Drax" or the "Company"; Symbol:DRX)
Capacity Market agreements for existing assets and review of coal generation
T-3 Auction Provisional Results
Drax confirms that it has provisionally secured agreements to provide a total of 2,562MW of capacity (de-rated 2,333MW) from its existing gas, pumped storage and hydro assets(1). The agreements are for the delivery period October 2022 to September 2023, at a price of £6.44/kW(2) and are worth £15 million in that period. These are in addition to existing agreements which extend to September 2022.
Drax did not accept agreements for its two coal units(3) at Drax Power Station or the small Combined Cycle Gas Turbine (CCGT) at Blackburn Mill(4) and will now assess options for these assets, alongside discussions with National Grid, Ofgem and the UK Government.
A new-build CCGT at Damhead Creek and four new-build Open Cycle Gas Turbine projects participated in the auction but exited above the clearing price and did not accept agreements.
T-4 Auction
Drax has prequalified its existing assets(5) and options for the development of new gas generation to participate in the T-4 auction, which takes place in March 2020. The auction covers the delivery period from October 2023.
CCGTs at Drax Power Station
Following confirmation that a Judicial Review will now proceed against the Government, regarding the decision to grant planning approval for new CCGTs at Drax Power Station, Drax does not intend to take a Capacity Market agreement in the forthcoming T-4 auction. This project will not participate in future Capacity Market auctions until the outcome of the Judicial Review is known.
Enquiries:
Drax Investor Relations: Mark Strafford
+44 (0) 7730 763 949
Media:
Drax External Communications:
Matt Willey +44 (0) 0771 137 6087
Website: www.drax.com
Notes:
(1) Gas (Damhead Creek, Rye House and Shoreham), Cruachan Pumped Storage and the Galloway hydro scheme (Tongland, Kendoon and Glenlee).
(2) Capacity Market agreements stated in 2017/18 real-terms, with payments indexed to UK CPI.
(3) Two x 645MW coal units.
(4) 60MW CCGT unit.
(5) One coal unit (unit six) did not prequalify, as this unit could be replaced by a new CCGT at Drax Power Station, subject to Judicial Review of the decision to grant planning approval and the acceptance of a Capacity Market agreement in a future auction.
END
