Capital Markets Day

RNS Number : 7027Q

Drax Group PLC

17 October 2013

 



17 October 2013

DRAX GROUP PLC

(Symbol: DRX)

Capital Markets Day

Drax is today hosting a capital markets day for investors and analysts at Drax Power Station, focusing on progress with the Group's transformation into a predominantly biomass-fuelled electricity generator. The event will be led by Dorothy Thompson, Chief Executive, supported by members of the senior management team from across the Group.

We have so far made very good progress with the transformation. The first unit converted to burn biomass in place of coal is performing well and capital investment is on schedule and budget. The capital markets day will demonstrate how, in order to execute successfully the transformation, the Group is leading the way in many aspects of electricity generation from biomass. The event will also include an update on regulatory matters.

Biomass Leadership

·     Biomass sustainability - Drax implemented an industry-leading sustainability policy in 2008 and is fully integrated into the process of UK policy and sustainability criteria development.

·     Biomass supply chain - we have designed and started construction of two pellet manufacturing facilities and devised bespoke port, storage and rail transport solutions for biomass pellets.

·     Biomass handling - we are well advanced with the construction of fuel delivery, storage and distribution systems at Drax Power Station.

·     Biomass generation - we now have over six months' experience operating the largest converted unit in the world. Whilst optimisation work continues, we have developed technical solutions to deliver output of 600MW from a converted Drax unit.

Regulatory Support, Capital Structure and Distributions

Drax took the decision to convert three units to biomass on the basis that regulatory support would be provided under the Renewables Obligation (RO). With this support, the transformation has the potential to deliver attractive returns under many reasonable scenarios.

The first unit was converted under the RO. Future unit conversions may be supported under the Contracts for Differences (CfD) mechanism. Clarity on whether our second and third unit conversions will be under the RO or CfD is likely to emerge over the first half of 2014.

Looking forward, Drax is committed to rewarding shareholders for their support during the capital investment cycle of the biomass transformation. The mix of RO and CfD units will be an important driver of our future capital structure and distribution policy.

Presentation Materials

Presentation materials from today's event are available on the Group's web site and may be accessed via the following link: http://www.drax.com/investor/results_and_reports/presentations/

Interim Management Statement

Drax will issue its next Interim Management Statement on 13 November 2013, which will deal with current trading matters.

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Enquiries:

Drax Investor Relations: Michael Scott

[phone]

Media:

Drax External Communications: Melanie Wedgbury

[phone]

Brunswick: Richard Jacques / Nina Coad

[phone]

Website: www.drax.com

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