Capacity Market Agreements

RNS Number : 6536B

Drax Group PLC

31 January 2020

 

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

[phone]

Media:

Drax External Communications:

Matt Willey [phone]

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.

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