Trading Statement

Drax Group PLC
13 December 2006


13 December 2006


                                 Drax Group plc

                                  Symbol: (DRX)

                                 Trading Update


Prior to entering its close period on 7 January 2007, Drax Group plc ('Drax')
announces the following trading update.


Contracted Position for 2006, 2007 and 2008

Since issuing the 2006 Interim announcement on 12 September 2006, Drax has
continued to trade in line with its expectations and to follow the stated
trading strategy of making steady forward power sales with corresponding carbon
and coal purchases. Drax's aim is to deliver market level or better dark green
spreads across all traded market periods and, as part of this strategy, Drax
retains power to be sold into the prompt (within season) power markets.

As at 6 December 2006 the contracted position for 2006, 2007 and 2008 were as
follows:

+------------------------------------+-------------+-------------+-------------+
|                                    |       2006  |       2007  |       2008  |
+------------------------------------+-------------+-------------+-------------+
|Output - percentage of expected     |             |             |             |
|annual production hedged            |         99% |         68% |         53% |
+------------------------------------+-------------+-------------+-------------+
|comprising:                         |             |             |             |
|     - Fixed price power sales at   |      99% at |      62% at |     31% at  |
|       an average achieved price    |      £48.8  |      £49.9  |     £49.2   |
|       per MWh                      |             |             |             |
+------------------------------------+-------------+-------------+-------------+
|     - Fixed margin power sales     |           - |          6% |         22% |
+------------------------------------+-------------+-------------+-------------+
|CO2 emissions allowances -          |             |             |             |
|percentage of expected annual       |             |             |             |
|requirement (including UK NAP       |             |             |             |
|allocation, market purchases and    |             |             |             |
|structured contracts)               |        100% |         73% |         67% |
+------------------------------------+-------------+-------------+-------------+
|Coal - percentage of expected       |             |             |             |
|annual requirement hedged           |        100% |         64% |         58% |
+------------------------------------+-------------+-------------+-------------+

Fixed margin power sales include approximately 1.3TWh in 2007 and 5.3TWh in 2008
under the five and a quarter year baseload contract with Centrica which
commences on 1 October 2007. Under this contract Drax will supply power on terms
which include Centrica paying Drax for coal, based on international coal prices,
and delivering matching CO2 emissions allowances amounting to approximately 4.7
million tonnes per annum. The contract provides Drax with a series of fixed dark
green spreads.

Drax will provide the next update on its contracted position in its 2006
Preliminary Results Statement expected to be issued on 8 March 2007.


2006 EBITDA and Closing Cash Position Guidance

Drax expects that EBITDA for year ending 31 December 2006 will be in the range
£578m to £585m (Note 1). It further expects that the closing cash position as at
31 December 2006 will be in the range £150m to £155m.

In arriving at the range for the 2006 EBITDA and the closing cash position as at
31 December 2006 Drax has taken account of:

   •Market prices, as at 6 December 2006, for the uncontracted portion of
    power sales, and coal and carbon purchases for the period to 31 December
    2006; and
   •Management's assumption that there will be no significant unplanned
    outages for the period to 31 December 2006.


Special Dividend

The Board expects to declare a special dividend in respect of the six months
ending 31 December 2006 at the 2006 Preliminary Results. The intention is to pay
the special dividend at the same time as the intended final ordinary dividend of
9.1 pence per share (being approximately £33.7 million). This is expected to be
in mid May 2007. Final arrangements will be announced in our Preliminary Results
Statement.


Turbine re-blading

Further to our interim presentation in September, Drax is pleased to report that
it has decided to proceed with the turbine re-blading project and is now in
final stage negotiation with the preferred supplier.

Using proven technology Drax expects each unit, following installation, to
achieve a baseload efficiency (Note 2) approaching 40%. This represents a 5%
improvement on current baseload efficiency of 38%. Installation, which will be
undertaken during the planned outage programme, is expected to take place
between 2008 and 2011. Total costs of approximately £100 million are expected to
be incurred on this project over the next five years. When complete, the project
is expected to deliver annual savings of approximately one million tonnes of CO2
emissions allowances and approximately half a million tonnes of coal.


Dorothy Thompson, Chief Executive of Drax said: 'I am very pleased with the
continued strong performance which builds on the robust results delivered in the
first half of the year. The decision to go ahead with the turbine re-blading
project demonstrates our commitment to invest in the future of the business and
importantly to tackling climate change, through an annual saving in CO2
emissions equivalent to taking 275,000 cars off the road.'



Enquiries:


Chief Executive: Dorothy Thompson

Finance Director: Gordon Boyd

[phone]


Drax Investor Relations: Andrew Jones

[phone]


Media

Drax External Relations: Melanie Wedgbury

[phone]


Tulchan Communications

David Trenchard and Peter Hewer

[phone]


Website: www.draxgroup.plc.uk

Notes:
(1)     EBITDA is profit before interest, tax, depreciation and amortisation,
        exceptional items and unrealised gains/losses on derivative contracts.

(2)     Baseload efficiency is the ratio of energy out to energy in when
        operating at full capacity.



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