Tag: customers

Half year results for the six months ended 30 June 2021

Engineers walking in front of sustainable biomass wood pellet storage dome at Drax Power Station, June 2021

RNS Number: 8333G
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)

Six months ended 30 JuneH1 2021H1 2020
Key financial performance measures
Adjusted EBITDA (£ million)(1)(2)186179
Continuing operations165160
Discontinued operations – gas generation2119
Net debt (£ million)(3)1,029792
Adjusted basic EPS (pence)(1)14.610.8
Interim dividend (pence per share)7.56.8
Total financial performance measures from continuing operations
Operating profit / (loss) (£ million)84(57)
Profit / (loss) before tax (£ million)52(85)

Will Gardiner, CEO of Drax Group, said:

“We have had a great first half of the year, transforming Drax into the world’s leading sustainable biomass generation and supply company as well as the UK’s largest generator of renewable power.

“The business has performed well, and we have exciting growth opportunities to support the global transition to a low-carbon economy.

Drax Group CEO Will Gardiner in the control room at Drax Power Station

Drax Group CEO Will Gardiner in the control room at Drax Power Station

“Drax has reduced its generation emissions by over 90%, and we are very proud to be one of the lowest carbon intensity power generators in Europe – a huge transformation for a business which less than a decade ago operated the largest coal power station in Western Europe.

“In the past six months we have significantly advanced our plans for Bioenergy with Carbon Capture and Storage (BECCS) in the UK and globally. By 2030 Drax could be delivering millions of tonnes of negative emissions and leading the world in providing a critical technology needed to tackle the climate crisis.

“We are pleased to be announcing a 10% increase in our dividend, and we remain committed to creating long-term value for all our stakeholders.” 

Financial highlights

Pinnacle named ship

  • Adjusted EBITDA from continuing and discontinued operations up £7 million to £186 million (H1 2020: £179 million)
  • Acquisition of Pinnacle Renewable Energy Inc. (Pinnacle) for cash consideration of C$385 million (£222 million) (enterprise value of C$796 million) and sale of gas generation assets for £186 million
  • Strong liquidity and balance sheet
    • £666 million of cash and committed facilities at 30 June 2021
    • Refinancing of Canadian facilities (July 2021) with lower cost ESG facility following Pinnacle acquisition
  •  Sustainable and growing dividend – expected full year dividend up 10% to 18.8 pence per share (2020: 17.1p/share)
    • Interim dividend of 7.5 pence per share (H1 2020: 6.8p/share) – 40% of full year expectation

Strategic highlights

Kentaro Hosomi, Chief Regional Officer EMEA, Mitsubishi Heavy Industries (MHI) at Drax Power Station, North Yorkshire

Kentaro Hosomi, Chief Regional Officer EMEA, Mitsubishi Heavy Industries (MHI) at Drax Power Station, North Yorkshire

  • Developing complementary biomass strategies for supply, negative emissions and renewable power
  • Creation of the world’s leading sustainable biomass generation and supply company
    • Supply – 17 operational plants and developments across three major fibre baskets with production capacity of 4.9Mt pa and $4.3 billion of long-term contracted sales to high-quality customers in Asia and Europe
    • Generation – 2.6GW of biomass generation – UK’s largest source of renewable power by output
  • >90% reduction in generation emissions since 2012
    • Sale of gas generation assets January 2021 and end of commercial coal March 2021
  • Development of BECCS
    • Planning application submitted for Drax Power Station and technology partner (MHI) selected
    • Participation in East Coast Cluster – phase 1 regional clusters and projects to be selected from late 2021
    • Partnerships with Bechtel and Phoenix BioPower evaluating international BECCS and biomass technologies
  • System support – option to develop Cruachan from 400MW to over 1GW – commenced planning approval process

 Outlook

  • Adjusted EBITDA, inclusive of Pinnacle from 13 April 2021, full year expectations unchanged

Operational review

Pellet Production – acquisition of Pinnacle, capacity expansion and biomass cost reduction

close-up of truck raising and lowering

  • Sustainable sourcing
    • Biomass produced using forestry residuals and material otherwise uneconomic to commercial forestry
    • Science-based sustainability policy fully compliant with current UK, EU law on sustainable sourcing aligned with UN guidelines for carbon accounting
    • All woody biomass verified and audited against FSC®(4), PEFC or SBP requirements
  • Adjusted EBITDA (including Pinnacle since 13 April 2021) up 60% to £40 million (H1 2020: £25 million)
    • Pellet production up 70% to 1.3Mt (H1 2020: 0.8Mt)
    • Cost of production down 8% to $141/t(5) (H1 2020: $154/t(5))
  • Near-term developments in US Southeast (2021-22)
    • Commissioning of LaSalle expansion, Demopolis and first satellite plant in H2
  • Other opportunities for growth and cost reduction
    • Increased production capacity, supply of biomass to third parties and expansion of fuel envelope to include lower cost biomass

Generation – flexible and renewable generation

  • 12% of UK’s renewable electricity, strong operational performance and system support services
  • Adjusted EBITDA down 14% to £185 million (H1 2020: £214 million)
    • Biomass – Lower achieved power prices and higher GBP cost of biomass reflecting historical power and FX hedging
    • Strong system support (balancing mechanism, Ancillary Services and optimisation) of £70 million (H1 2020: £66 million) – additional coal operations and continued good hydro and pumped storage performance, in addition to coal operations
    • Coal – utilisation of residual coal stock in Q1 2021 and capture of higher power prices
  • Pumped storage / hydro – good operational and system support performance
    • £34 million of Adjusted EBITDA (Cruachan, Lanark, Galloway schemes and Daldowie) (H1 2020: £35 million)
  • Ongoing cost reductions to support operating model for biomass at Drax Power Station from 2027
    • End of commercial coal operations in March, formal closure September 2022 – reduction in fixed cost base
    • Major planned outage for biomass CfD unit – August to November 2021 – including third turbine upgrade delivering improved thermal efficiency and lower maintenance cost, supporting lower cost biomass operations
    • Trials to expand range of lower cost biomass fuels – up to 35% load achieved in test runs on one unit
  • Strong contracted power position – 29.3TWh sold forward at £52.1/MWh 2021-2023. Opportunities to capture higher power prices in future periods, subject to liquidity
As at 25 July 2021 202120222023
Fixed price power sales (TWh) 15.99.14.3
-      CfD(6)3.80.6-
-      ROC10.88.44.0
-      Other1.30.10.3
At an average achieved price (£ per MWh)51.752.452.7

Customers – renewable electricity and services under long-term contracts to high-quality I&C customer base

 

  • Adjusted EBITDA loss of £5 million inclusive of £10-15 million impact of Covid-19 (H1 2020 £37 million loss inclusive of £44 million impact of Covid-19)
  • Continuing development of Industrial & Commercial (I&C) portfolio
    • Focusing on key sectors to increase sales to high-quality counterparties supporting generation route to market
    • Energy services expand the Group’s system support capability and customer sustainability objectives
  • Closure of Oxford and Cardiff offices as part of SME strategic review and the rebranding of the Haven Power I&C business to Drax
  • Continue to evaluate options for SME portfolio to maximise value and alignment with strategy

Other financial information

  • Total operating profit from continuing operations of £84 million including £20 million mark-to-market gain on derivative contracts and acquisition related costs of £10 million and restructuring costs of £2 million
  • Total loss after tax from continuing operations of £6 million including a £48 million charge from revaluing deferred tax balances following announcement of future UK tax rate changes
  • Total loss after tax from continuing operations of £6 million including a £48 million charge from revaluing deferred tax balances following confirmation of UK corporation tax rate increases from 2023
  • Capital investment of £71 million (H1 2020: £78 million) – continued investment in biomass strategy
    • Full year expectation of £210–230 million, includes pellet plant developments – LaSalle expansion, satellite plants and commissioning of Demopolis
  • Group cost of debt now below 3.5% reflecting refinancing of Canadian facilities in July 2021
  • Net debt of £1,029 million (31 December 2020: £776 million), including cash and cash equivalents of £406 million (31 December 2020: £290 million)
    • 5x net debt to Adjusted EBITDA, with £666 million of total cash and committed facilities (31 December 2020: £682 million)
    • Continue to expect around 2.0x net debt to Adjusted EBITDA by end of 2022
View complete half year report View investor presentation Listen to webcast

Full year results for the twelve months ended 31 December 2020

Water outlet into Loch Awe from Cruachan Power Station

Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)
RNS Number : 2751Q

Twelve months ended 31 December20202019
Key financial performance measures
Adjusted EBITDA (£ million) (1)(2)412410
Continuing operations366371
Discontinued operations – gas generation4639
Cash generated from operations (£ million)413471
Net debt (£ million) (3)776841
Adjusted basic EPS (pence) (1)29.629.9
Total dividend (pence per share)17.115.9
Total financial performance measures
Coal and other asset obsolescence charges(239)-
Operating (loss) / profit (£ million)(156)48
Loss before tax (£ million)(235)(16)

Financial highlights

  • Adjusted EBITDA from continuing and discontinued operations up £2 million to £412 million (2019: £410 million)
    • Includes estimated impact of Covid-19 of around £60 million, principally SME customers
    • Strong performance in Pellet Production and Generation
  • Strong cash generation and balance sheet
    • 1.9 x net debt to Adjusted EBITDA, with £682 million of cash and committed facilities at 31 December 2020
    • New carbon-linked RCF, Eurobond and infrastructure facilities with maturities to 2030 and reduced cost of debt
  • Sustainable and growing dividend up 7.5% to 17.1 pence per share (2019: 15.9 pence per share)
    • Proposed final dividend of 10.3 pence per share (2019: 9.5 pence per share)

Operational highlights

  • Pellet Production – 7% increase in production, improved quality and 5% reduction in cost
  • Generation – 11% of UK’s renewable electricity, strong operations and system support performance
  • Customers – lower demand and an increase in bad debt provisions, principally SME customers
  • Sustainability – sale of gas assets, end of coal generation, CDP Climate A- rating (2019: C) and TCFD Supporter
Train carrying sustainably sourced compressed wood pellets arriving at Drax Power Station in North Yorkshire

Train carrying sustainably sourced compressed wood pellets arriving at Drax Power Station in North Yorkshire [click to view/download]

Will Gardiner, CEO of Drax Group said:

“Drax has supported its customers, communities and employees throughout the Covid-19 pandemic and I want to thank colleagues across the Group for their commitment and hard work over the last year. We have delivered strong results, a growing dividend for shareholders and excellent progress against our business strategy.

Drax Group CEO Will Gardiner

Drax Group CEO Will Gardiner in the control room at Drax Power Station [Click to view/download]

“Our focus is on renewable power. Our carbon intensity is one of the lowest of all European power generators. We aim to be carbon negative by 2030 and are continuing to make progress. We are announcing today that we will not develop new gas fired power at Drax. This builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations.

“The proposed acquisition of Pinnacle Renewable Energy will position Drax as the world’s leading sustainable biomass generation and supply business, paving the way for us to develop bioenergy with carbon capture and storage (BECCS) – taking us even further in our decarbonisation.”

2021 outlook

  • Targeting carbon negative
    • No new gas generation at Drax Power Station, retain options for system support gas in next capacity auction
    • Completion of sale of existing gas generation (January 2021) and end of commercial coal (March 2021)
  • Progressing biomass strategy
    • Proposed acquisition of Pinnacle Renewable Energy Inc. (Pinnacle) – supports long-term options for third-party supply, BECCS and biomass generation
    • BECCS – commencement of DCO planning process, potential FEED study and clarity on regional clusters

Infographic: How BECCS removes carbon from the atmosphere

  • Operations
    • Major planned outage on CfD unit and continued impact of Covid-19 on SME customers
    • Strong contracted power sales (2021–2023) 24.4TWh at £48.5/MWh

Operational review

Pellet Production – capacity expansion, improved quality and reduced cost

  • Adjusted EBITDA up 63% to £52 million (2019: £32 million)
    • Pellet production up 7% to 1.5Mt (2019: 1.4Mt)
    • Reduction in fines (larger particle-sized dust)
    • Cost of production down 5% to $153/t(4) (2019: $161/t(4))
  • Cost reduction plan – targeting $35/t (£13/MWh(5)) saving vs. 2018 on 1.9Mt by 2022 – annual savings of $64 million
    • $28 million of run-rate savings from projects delivered 2019-2020
    • Low-cost fibre, LaSalle (improved rail infrastructure, woodyard and sawmill co-location) and HQ relocation
    • $36 million of additional run-rate savings to be delivered by end of 2022
    • Expansion of Morehouse plant completed Q4 2020
    • Expansion of Amite and LaSalle, increased use of low-cost fibre and improved logistics
  • Additional savings from $40 million investment in three 40kt satellite plants in US Gulf – commissioning from 2021, with potential for up to 0.5Mt – targeting 20% reduction in pellet cost versus current cost

 Power Generation – flexible and renewable generation

  • Adjusted EBITDA up 9% to £446 million (2019: £408 million)
    • Biomass generation up 5% to 14.1TWh (2019: 13.4TWh) – record CfD availability (Q2 2020 – 99.5%)
    • Good commercial availability across the portfolio – 91% (2019: 88%)
    • Strong contracted position provided protection from lower demand and reduction in ROC(6) prices
    • Includes £46 million from discontinued gas (2019: £39 million)
Water cooling tower at Drax Power Station

Water cooling tower at Drax Power Station [click to view/download]

  • System support (balancing mechanism, Ancillary Services and optimisation) of £118 million (2019: £120 million)
    • Hydro and gas – one-off hydro contracts in 2019, offset by higher demand for system support services in 2020
    • Lower level of biomass activity due to higher value in generation market
    • 2019 included benefit of buying back coal generation
  • Pumped storage / hydro – excellent operational and system support performance
    • £73 million of Adjusted EBITDA (Cruachan, Lanark Galloway schemes and Daldowie) (2019: £71 million)
Aqueduct supplying water into the reservoir at Cruachan pumped hydro storage plant in Scotland

Aqueduct supplying water into the reservoir at Cruachan pumped hydro storage plant in Scotland [click to view/download]

  • Coal – 8% of output in 2020 and short-term increase in carbon emissions – utilisation of coal stock by March 2021
  • Covid-19 – business continuity plan in place to ensure continued operation and two major outages completed

Customers – managing the impact of Covid-19 on SME customers

  • Customer service employeeAdjusted EBITDA loss of £39 million (2019: £17 million profit) inclusive of estimated £60 million impact of Covid-19
    • Reduced demand, MtM loss on pre-purchased power and increase in bad debt, principally SME customers
    • Continue to evaluate SME options to maximise value and alignment with strategy
  • Development of Drax Customers Industrial & Commercial portfolio – increased sales to high-quality counterparties providing revenue visibility, while supporting the Group’s flexible and renewable energy proposition
  • Renewable and energy services expand Group system support capability and customer sustainability objectives

Other financial information

  • Total operating loss from continuing operations of £156 million reflects:
    • £70 million MtM loss on derivative contracts
    • £239 million obsolescence charges, principally coal (includes £13 million associated with decision not to develop new gas generation at Drax Power Station)
    • £34 million of costs associated with coal closure (redundancy, pensions and site reparations), with annual run-rate savings once complete of c.£30-35 million
  • Total loss after tax of £158 million includes £18 million reduced valuation of deferred tax asset resulting from UK Government’s reversal of previously announced corporation tax rate change (adjusted impact of £14 million, 3.5 pence per share)
  • Capital investment of £183 million(7) – continued invest in biomass strategy, some delay into 2021 due to Covid-19
    • 2021 expected investment of £190-210 million (excludes proposed acquisition of Pinnacle), includes expansion of LaSalle and Amite pellet plants and satellite plant development
  • Net debt of £776 million, including cash and cash equivalents of £290 million (31 December 2019: £404 million)
      • 1.9 x net debt to EBITDA, with £682 million of total cash and total committed facilities
      • Expect around 2 x net debt to EBITDA by end of 2022 inclusive of proposed acquisition of Pinnacle

 


View complete full year report View investor presentation Listen to webcast

Turning waste into watts

Fields being ploughed by tractor

Think of carbon emissions and the image that comes to mind is often of industrial sites or power generation – not of what we eat and what we throw away. But food waste is a major contributor of greenhouse gas emissions.

Globally, food loss and waste from across the food chain generates the equivalent of 4.4 gigatonnes of carbon dioxide (CO2) a year, or about 8% of total greenhouse gas emissions.

But what if there was a way to reduce those emissions and generate power by using discarded food and other organic waste like grass cuttings or nut shells? A technology known as anaerobic digestion is increasingly making this idea a reality.

How anaerobic digestion works

All organic waste products have energy in them, but it’s tied up in the form of calories. When food and vegetation rots, microorganisms break down those calories into gases and other products.

Methane or Ammonium molecules. Science concept. 3D rendered illustration.

Methane or Ammonium molecules.

Exactly what these ‘other products’ are depends on whether there is any oxygen present. With oxygen, the products are water, CO2 and ammonia, but remove oxygen from the equation and a very valuable gas is produced: methane (CH4). The lack of oxygen is also what gives anaerobic digestion its name – when oxygen is present it becomes aerobic digestion.

During the anaerobic digestion process, bacteria and other microorganisms break down organic matter, gradually deteriorating complex polymers like glucose or starch into progressively simpler elements, such as alcohol, ammonia, CO2 and, ultimately, CH4, a biogas with huge potential as a fuel for other processes.

Anaerobic power in practice

The CH4 produced in anaerobic digestion is incredibly useful as a fuel – turn on a gas hob or stovetop and it’s predominantly methane that provides the fuel for the flame. The chemical compound is also the main component in the natural gas that makes up much of Great Britain’s electricity supply.

This means using anaerobic digestion to create CH4 out of waste products turns that waste into a valuable power source. But it’s not as simple as putting a bag over a rubbish tip and hoping for the best.

Instead, anaerobic digestion is carried out in large tanks called digesters. These are filled with feedstocks from biological substances that can include anything from food scraps, to alcohol and distillery waste, to manure. Under the right conditions microorganisms and bacteria begin to digest and breakdown these substances into their basic elements.

The air quantity and temperature of the digesters is carefully regulated to ensure the microorganisms have the best possible environment to carry out the digestion of the feedstock, with different types of feedstock and microorganisms operating best in different conditions.

The biogas created as a result of this digestion is then captured, ready to be turned into something useful.

biogas plant

Making use of biogas

Three different things can happen to the biogas produced during the course of the digestion. Locally, it can be combusted on-site to provide further heat to regulate the temperature of the anaerobic digestion units.

Or, it can be combusted in a combined heat and power (CHP) generator, where it can generate electricity to be used on site — for example to power a farm — or sold through energy suppliers such as Opus Energy onto wider regional or national electricity networks. This biogas electricity is an important element of Great Britain’s energy supply, accounting for 6,600 GWh or 7.3% of all power generated by solid and gaseous fuels in 2017.

Some of the biogas can even be cleaned to remove CO2, leaving behind pure methane that can be pumped onto natural gas grids and used to provide heat and power to households. Government research estimates a fully utilised biogas sector could provide up to 30% of the UK’s household gas demands.

After the digestion process has been completed and the biogas has been removed, what is left behind in the digester is a mass of solid matter called digestate. This is extremely rich in nutrients and mineral, such as potassium and nitrogen, making it an excellent soil enhancer.

Where anaerobic digestion is being used today

Today, much of anaerobic digestion power is generated on farms – unsurprisingly, given the ready access to biological waste material to use as feedstock. As well as a potential source of electricity and heat, it also gives farmers access to a new revenue stream, by selling electricity or biogas, as well as reducing utility and fertiliser costs.

While many of these installations are smaller scale, some can get quite big. Linstock Castle Farm in North Cumbria, for example, has a biogas facility with a 1.1 megawatt(MW) operating capacity, enough to power as many as 2,000 homes at a time. It was originally installed by the farmers as a more cost-effective way of growing their business than buying more dairy cows.

Biogas plant on a farm processing cow dung as a secondary business activity

There is, however, potential for anaerobic digestion to operate on an even larger scale. In the US, the city of Philadelphia is developing a system that will link all newly built households together into a network where food waste is automatically collected and transported to a biogas generating facility.

Closer to home, Northumbrian Water uses 100% of its sludge, the waste produced from purifying water, to produce renewable power via anaerobic digestion. It’s estimated to have reduced the carbon footprint of the facility’s operations by around 20%, and saved millions of pounds in savings on operating costs.

There have also been experiments with using biogas to power vehicles. The ‘Bio-Bus’ was the first bus in the UK to be powered by biomethane made from food, sewage and commercial liquid waste, and ran between Bath and Bristol Airport.

But anaerobic digestion power is not a magic bullet. It will be right in certain situations, but not all. If utilised effectively, anaerobic digestion and biogas could fill a vital role in national electricity and gas networks, while at the same time helping dispose of waste products in an environmentally-friendly and cost-effective way.

Half year results for the six months ended 30 June 2020

LaSalle BioEnergy (centre) and co-located sawmill (right), Louisiana

RNS Number : 3978U
Drax Group PLC (Symbol: DRX)

Six months ended 30 JuneH1 2020H1 2019
Key financial performance measures
Adjusted EBITDA (£ million) (1)(2)179138
Cash generated from operations (£ million)226229
Net debt (£ million) (3)792924
Interim dividend (pence per share)6.86.4
Adjusted basic earnings per share (pence) (1)10.82
Total financial performance measures
Coal obsolescence charges-224-
Operating (loss) / profit (£ million)-3234
(Loss) / profit before tax (£ million)-614
Basic (loss) / earnings per share (pence)-141

Financial highlights

  • Group Adjusted EBITDA up 30% to £179 million (H1 2019: £138 million)
    • Includes estimated £44 million impact of Covid-19, principally in Customers SME business
    • £34 million of capacity payments (H1 2019: nil) following re-establishment of the Capacity Market
    • Strong biomass performance in both Pellet Production and Generation
  • Strong cash generation and balance sheet
    • £694 million of cash and total committed facilities
    • Extended £125 million ESG CO2 emission-linked facility to 2025
    • DBRS investment grade rating
  • Sustainable and growing dividend
    • Expected full year dividend up 7.5% to 17.1 pence per share (2019: 15.9 pence per share), subject to good operational performance and impact of Covid-19 being in line with current expectations
    • Interim dividend of 6.8 pence per share (H1 2019: 6.4 pence per share) – 40% of full year
Biomass storage dome with conveyor in the foreground, Drax Power Station, North Yorkshire

Biomass storage dome with conveyor in the foreground, Drax Power Station, North Yorkshire [Click to view/download]

Operational highlights

  • Biomass self-supply – 9% reduction in cost, 15% increase in production and improved quality vs. H1 2019
  • Generation – 11% of UK’s renewable electricity, strong operational performance and system support services
  • Customers – lower demand and an increase in bad debt provisions, principally in SME business

Progressing plans to create a long-term future for sustainable biomass

  • Targeting five million tonnes of self-supply at £50/MWh(4) by 2027 from expanded sources of sustainable biomass
    • Plan for $64 million ($35/t, £13/MWh(4)) annual savings on 1.85Mt by 2022 vs. 2018 base
    • Investment in new satellite plants in US Gulf – targeting 20% reduction in pellet cost versus current cost
  • BECCS(5) – developing proven and emerging technology options for large-scale negative emissions
  • End of coal operations – further reduction in CO2 emissions and lower cost operating model for biomass

Outlook

  • Full year Adjusted EBITDA, inclusive of c.£60 million estimated impact of Covid-19, in line with market consensus
  • Evaluating attractive investment options for biomass growth: cost reduction and capacity expansion
  • Strong contracted power sales (2020–2022) 34TWh at £51.4/MWh and high proportion of non-commodity revenues

Will Gardiner, CEO of Drax Group said:

“With these robust half-year results, Drax is delivering for shareholders with an increased dividend while continuing to support our employees, communities and customers during the Covid-19 crisis.

Drax Group CEO Will Gardiner

Drax Group CEO Will Gardiner in the control room at Drax Power Station [Click to view/download]

“As well as generating the flexible, reliable and renewable electricity the UK economy needs, we’re delivering against our strategy to reduce the costs of our sustainable biomass and we’re continuing to make progress pioneering world-leading bioenergy with carbon capture technologies, known as BECCS, to deliver negative emissions and help the UK meet its 2050 net zero carbon target.

“National Grid stated this week that the UK can’t reach net zero by 2050 without negative emissions from bioenergy with carbon capture and storage. BECCS delivers for the environment and also provides an opportunity to create jobs and clean economic growth in the North and around the country.”

Operational review

Pellet Production – capacity expansion, improved quality and reduced cost

  • Adjusted EBITDA up 213% to £25 million (H1 2019: £8 million)
    • Pellet production up 15% to 0.75Mt (H1 2019: 0.65Mt) – impact of adverse weather in H1 2019
    • Cost of production down nine per cent to $154/t(6) (H1 2019: $170/t(6))
    • Reduction in fines (larger particle-sized dust) in each cargo
  • Cost reduction plan – targeting $64 million ($35/t, £13/MWh(4)) annual savings on 1.85Mt by 2022 vs. 2018 base
    • Expect to deliver $27 million of annual savings by end of 2020 – a saving of $18/t vs. 2018
    • Greater use of low-cost fibre, LaSalle (improved rail infrastructure, woodyard and sawmill co-location) and relocation of HQ from Atlanta to Monroe
    • Savings from projects to be delivered in 2020-2022
    • 35Mt capacity expansion (LaSalle, Morehouse and Amite), increased use of low-cost fibre, improved logistics and other operational enhancements
  • $40 million investment in three 40kt satellite plants in US Gulf – commissioning from 2021, potential for up to 0.5Mt
    • Use of Drax infrastructure and sawmill residues – targeting 20% reduction in pellet cost versus current cost
Power lines and pylon above Cruachan Power Station, viewed from Ben Cruachan above

Power lines and pylon above Cruachan Power Station, viewed from Ben Cruachan above [Click to view/download]

Power Generation – flexible, low-carbon and renewable generation

  • Adjusted EBITDA up 45% to £214 million (H1 2019: £148 million)
    • Limited impact from Covid-19 – strong contracted position provided protection from lower demand, reduction in ROC(7) prices offset by increased system support services
    • £34 million of Capacity Market income (H1 2019: nil; £36 million in relation to H1 2019 subsequently recognised in H2 2019 following re-establishment of the Capacity Market)
    • £54 million of Adjusted EBITDA from hydro and gas generation assets (H1 2019: £36 million)
    • System support (Balancing Market, ancillary services and portfolio optimisation) up 8% to £66 million (H1 2019: £61 million)
    • Good commercial availability across the portfolio – 91% (H1 2019: 87%)
  • Covid-19 – business continuity plan in place to ensure safe and uninterrupted operations
  • Biomass generation up 16% to 7.4TWh (H1 2019: 6.4TWh)
    • Strong supply chain (impact of adverse weather in H1 2019) and record CfD availability (Q2 2020 – 99.5%)
  • Pumped storage / hydro – excellent operational and system support performance
  • Gas – excellent operational and system support performance, Damhead Creek planned outage underway
  • Coal – 10% of output in H1 2020 – utilisation of coal stock before end of commercial generation (March 2021)

Customers – managing the impact of Covid-19 on SME business

  • Adjusted EBITDA loss of £37 million (H1 2019: £9 million profit) inclusive of estimated £44 million impact of Covid-19 – reduced demand, MtM loss on pre-purchased power and increase in bad debt, principally in SME business
  • Covid-19 – implemented work from home procedures to allow safe and continuous operations and customer support
  • Good performance in Industrial and Commercial market – new contracts with large water companies providing five-year revenue visibility, while supporting the Group’s flexible, renewable and low-carbon proposition
  • Monitoring and optimisation of portfolio to ensure alignment with strategy

Other financial information

  • Total financial performance measures reflects £108 million MtM gain on derivative contracts, £224 million coal obsolescence charges and £10 million impact (£6 million adjusted impact) from UK Government’s reversal of previously announced corporation tax rate reduction resulting in revaluation of deferred tax asset and increased current tax charge
    • Additional c.£25–£35 million for coal closure costs expected to be reported as exceptional item in H2 2020 when coal consultation process is further advanced
  • Capital investment – continuing to invest in biomass strategy, some delay in investment due to Covid-19
    • H1 2020: £78 million (H1 2019: £60 million)
    • Full year expected investment £190–£210 million (was £230–£250 million), includes 0.35Mt expansion of existing pellet plants and $20 million initial investment in satellite plants ($40 million in total)
  • Net debt of £792 million, including cash and cash equivalents of £482 million (31 December 2019: £404 million)
    • Remain on track for around 2.0x net debt to Adjusted EBITDA by end of 2020

View complete half year report

View analyst presentation

Listen to webcast

View/download main image. Caption: LaSalle BioEnergy (centre) and co-located sawmill (right), Louisiana


In a crisis people come first

This crisis will be remembered for many things. Many are not positive, but some are inspiring. Around the world we’ve seen tremendous acts of kindness and witnessed remarkable resilience from people continuing to live, work and to support one another. The actions we are all taking as individuals, businesses and communities will not only help us get through this crisis, they will shape how we emerge from it.

At Drax we are proud of the ongoing role we’re playing in supporting the UK and its essential services, continuing to generate and supply the electricity needed to keep people healthy and the economy running.

It is what we have always done, and it is what we will continue to do.

This is possible because our people have continued to carry out their important work in these uncertain times safely and responsibly. My leadership team in the UK and US must continue to support them, and we must also support the communities they are a part of.

Employees Drax Power Station show their support and appreciation for the heroic efforts of those within the NHS by turning one of its cooling towers blue at 8pm each Thursday

Employees Drax Power Station show their support and appreciation for the heroic efforts of those within the NHS by turning one of its cooling towers blue at 8pm each Thursday

Our communities are at the core of what we do and who we are. They support our business globally and enable us to supply energy to the country. We have a responsibility to do what we can to help them through this crisis.

To do this we have put together a Covid-19 support package totalling more than three quarters of a million pounds that goes beyond just financing to make a positive impact. I’d like to highlight a few of these.

Supporting communities in Great Britain and the US

The Robinson family collect their laptop at Selby Community Primary School

The closures of schools and the need to turn homes into classrooms has been one of the biggest changes for many families. With children now depending on technology and the internet for schooling, there’s a very real chance those without access may fall behind, with a long term negative impact on their education.

We want to ensure no child is left out. So, we have donated £250,000 to buy 853 new laptops, each with three months of pre-paid internet access, and delivered them to schools and colleges local to our sites across the UK.

This has been implemented by Drax, working closely with headteachers. As one of our local heads Ian Clennan told us: “Schools don’t just provide education – they’re a whole support system. Having computers and internet access means pupils can keep in touch with their teachers and classmates more easily too – which is also incredibly important at the moment.”

In the US, we’re donating $30,000 to support hardship funds for the communities where we operate. Our colleagues in Louisiana are playing an active role in the community, and in Amite County, Mississippi, they have helped provide PPE to first responders as well as supporting charities for the families worse affected.

Helping businesses, starting with the most vulnerable

As an energy supplier to small and medium sized businesses (SMEs), we must act with compassion and be ready to help those who are most economically exposed to the crisis. To do this, we are launching a number of initiatives to support businesses, starting with some of the most vulnerable.

It’s clear that care homes require extra support at this time. We are offering energy bill relief for more than 170 small care homes situated near our UK operations for the next two months, allowing them to divert funds to their other priorities such as PPE, food or carer accommodation.

But it is also important we understand how difficult a period this is for small businesses of all kinds. Many of our customers are facing financial pressure that was impossible to forecast. To help relieve this, we have agreed deferred payment plans with some of our customers who are unable to pay in full. We have also extended current energy prices for three months for 4,000 customers of Opus Energy who have not been able to secure a new contract during this period.

The impact of this crisis will be long term, so we made a significant, two-year charitable donation to Business Debtline. A dedicated phoneline and webpage will be provided to our small businesses customers, offering free debt advice and helping them to recover for the future.

An engineer looks up at flue gas desulphurisation unit (FGD) at Drax Power Station. The massive pipe would transport flue gas from the Drax boilers to the carbon capture and storage (CCS) plant for CO<sub>2</sub> removal of between 90-95%.

An engineer looks up at flue gas desulphurisation unit (FGD) at Drax Power Station. The massive pipe would transport flue gas from the Drax boilers to the carbon capture and storage (CCS) plant for CO2 removal of between 90-95%.

Change for the future recovery

While there is still uncertainty around how the UK, the US and the world will emerge from the pandemic it is the responsibility of the whole energy industry to show compassion for its customers and to take the actions needed to soften the economic blow that Covid-19 is having across the globe.

The disruption to normal life caused by the pandemic has changed how the country uses electricity overnight. In the coming weeks we will be publishing a more in-depth view from Electric Insights showing exactly what effect this has had and what it might reveal for the future of energy.

No matter what that future holds, however, we will remain committed to enabling a zero carbon, lower cost energy future. This will mean not only supporting our people, our communities and our countries through the coronavirus crisis, but striving for a bright and optimistic future beyond it. A future where people’s immediate health, safety and economic wellbeing are prioritised alongside solutions to another crisis – that of climate change.

Robust trading and operational performance; 2020 Adjusted EBITDA currently in line with consensus; delivering for all stakeholders

Drax employee in PPE in front of biomass storage dome

RNS Number : 4161K
Drax Group plc
(“Drax” or the “Company”; Symbol: DRX)

Highlights

  • Robust trading and operational performance in first three months of 2020

  • Strong contracted forward power sales supporting 2020-21 earnings visibility

  • 2020 full year Adjusted EBITDA(1) currently in line with consensus(2) inclusive of £60 million estimated potential impact from Covid-19

  • Principally lower power demand and increased bad debt risk in Customers business

  • Lower ROC(3) recycle prices in Generation, partially offset by system support services

  • Strong balance sheet at 31 March 2020 – net debt: £818 million, available cash and committed cash facilities: £663 million

  • 2019 final dividend of 9.5 pence per share (£37 million) to be paid in respect of 2019 performance, as previously announced – subject to shareholder approval at AGM

  • Strategic focus remains on biomass supply chain expansion and cost reduction

Electricity pylon near Cruachan Power Station, Argyll and Bute

Electricity pylon near Cruachan Power Station, Argyll and Bute [Click to view/download]

Will Gardiner, Drax Group CEO, said:

“With our strong balance sheet, robust trading and operational performance, and resilient sustainable biomass supply chain, Drax is in a strong position to support its employees, business customers and communities during the Covid-19 crisis, while continuing to generate returns for shareholders.

Drax Group CEO Will Gardiner

Drax Group CEO Will Gardiner in the control room at Drax Power Station. Click to view/download.

“As an important part of the UK’s critical national infrastructure, we recognise our responsibility to support the country’s response to Covid-19. We have strong business continuity plans in place and are in close contact with the UK Government. Our dedicated teams across England, Scotland and Wales, supported by our US biomass colleagues and business partners, are working around the clock to generate and supply the flexible, low-carbon and renewable electricity the UK needs, not least to the 250,000 businesses, including care homes, hospitals and schools we supply.

“The Group is also providing support for communities and others affected by Covid-19.

“Nevertheless, it is still early in this pandemic. As Covid-19 continues to develop, we remain vigilant in looking to protect all our stakeholders and will report further if there are significant changes to our outlook for 2020.”

Trading, operational performance and outlook

The trading and operational performance of the Group has been robust in the first three months of 2020.

While the impact of Covid-19 is still unfolding, the Group’s expectations for 2020 Adjusted EBITDA are currently in line with consensus inclusive of an estimated potential impact from Covid-19 of £60 million, principally in relation to its Customers business.

Full year expectations for the Group remain underpinned by good operational availability for the remainder of 2020.

In the Customers business, the consequences of Covid-19 are only now starting to become visible. It is expected to result in reduced demand and a potential increase in bad debt, which represents a major sensitivity, particularly in the SME(4) market. As a result, Drax has significantly increased its expectation of potential customer business failures and higher bad debt.

Assuming the continued impact of Covid-19 throughout 2020, Drax now expects a full year Adjusted EBITDA loss for the Customers business. The Group will closely monitor the impact on the Customers business and update the market accordingly.

In Generation, the Group’s expectations for the full year reflect a reduction in ROC recycle prices resulting from reduced power demand. Drax expects to partially offset this through increased activity in system support services across its generation portfolio.

The performance of the Generation business is dependent on the continuation of biomass deliveries to Drax Power Station. Biomass generation is currently the most material area of activity for the Group and a protracted suspension of the supply chain could lead to lower levels of biomass generation, resulting in a reduction in the Group’s expectations for the full year. At present there has been no impact from Covid-19 and the Group has a good supply of biomass throughout the supply chain, which continues to be robust and functioning well.

Engineer climbs cooling tower at Drax Power Station

Engineer climbs cooling tower at Drax Power Station [Click to view/download]

Generation

During the first three months of 2020 Drax’s generation portfolio performed well with good asset availability and optimisation of generation underpinning a strong financial performance.

The business benefits from a strong forward power sales position through 2022 which, combined with index-linked renewable schemes and capacity payments, provides a high level of earnings visibility, helping to protect the business from the current weakness in UK power prices.

In response to Covid-19, Drax has implemented robust business continuity procedures across its sites to protect employees and contractors and ensure continued operation. In addition to operating strategically important infrastructure, the components of the Group’s UK supply chain are considered key sectors allowing continued operation.

The Group’s biomass supply chain has a high level of operational redundancy designed to mitigate any potential disruption. Drax sources biomass from suppliers across North America and Europe, including the Group’s own facilities in Louisiana and Mississippi. In the UK, Drax utilises dedicated port facilities at Hull, Immingham, Tyne and Liverpool, with a capacity of eleven million tonnes, providing supply chain capacity in excess of the Group’s annual biomass usage of over seven million tonnes.

Sustainable biomass wood pellets destined for Drax Power Station unloaded from the Zheng Zhi bulk carrier at ABP Immingham

Sustainable biomass wood pellets destined for Drax Power Station unloaded from the Zheng Zhi bulk carrier at ABP Immingham [Click to view/download]

Drax Power Station has 300,000 tonnes of biomass storage capacity. Taken together with volumes throughout its supply chain the Group currently has visibility of over one million tonnes of biomass in transit – enough to operate the CfD(5) unit on its own for over four months, subject to managing deliveries to Drax Power Station.

Biomass generation has performed well in the first three months of 2020. Whilst Covid-19 has not had any measurable impact on biomass generation to date, a sustained reduction in electricity demand could result in a reduction in ROC recycle prices in the current compliance period. The Group has adjusted its expectations for the full year but the precise impact will be dependent on the depth and duration of any reduction in demand. Drax expects to partially offset this through increased activity in system support services across its generation portfolio.

Engineer at Cruachan Power Station

Engineer at Cruachan Power Station [Click to view/download]

The Group’s hydro assets have performed well, particularly the pumped storage business, primarily driven by activity in the system support services market. As previously disclosed, Cruachan Pumped Storage Power Station was successful in a tender process run by the system operator to procure inertia and reactive power services. The contract is worth up to c.£5 million per year over six years and is expected to commence during the second quarter of 2020. This was the first tender of its kind and reflects the growing importance of system support services as the generation market becomes increasingly supplied by intermittent renewable power sources. The system operator is expected to conduct further tenders over the coming year.

Thermal generation is performing in line with Drax’s expectations.

Pellet Production

LaSalle BioEnergy wood pellet manufacturing plant in Louisiana

LaSalle BioEnergy wood pellet manufacturing plant in Louisiana [Click to view/download]

Pellet Production has performed well in the first three months of 2020.

At present there has been no disruption to production caused by Covid-19, although the State of Louisiana is experiencing a high number of cases. The semi-automated nature of the pellet production process limits the need for individuals to be in contact with each other and this has been enhanced by robust business continuity procedures to further reduce the risk to employees and contractors.

Drax continues to monitor developments closely and notes that energy, rail, port and forestry are designated key sectors in the USA allowing continued operation.

Customers

The Group’s Customers business, which sells power, gas and energy services to the I&C(6) and SME markets has seen a significant reduction in demand as a result of Covid-19. The Group has been working to assess the potential impact of this demand reduction, the increased risk of business failure and bad debt. The impact is expected to be most pronounced in the SME market, which represents c.30 percent of monthly billing. The impact is expected to be partially mitigated by credit insurance in respect of certain customers.

Balance sheet

At 31 December 2019 Drax had £404 million of cash, which increased to £454 million at 31 March 2020.

The Group’s plan for 2020 included capital investment of £230-£250 million, with half of this assigned to strategic investment in biomass expansion and cost reduction. Whilst the Group continues to see its biomass strategy as both a primary long and short-term source of value, Drax is reviewing the timing of its investment programme in 2020 and in the short-term investment is expected to be lower.

At 31 March 2020 net debt had reduced to £818m million and Drax continues to target around 2 x net debt to EBITDA for the full year.

The Group has available cash and committed facilities of £663 million including a cash line available within a £315 million Revolving Credit Facility (RCF), which is currently undrawn and matures in April 2021. The Group has an ESG facility with final maturity in 2022 and a £350m sterling bond which matures in 2022. The Group has a further $500 million fixed rate USD bond maturing in 2025 and infrastructure private placement loans maturing through 2024-2029.

The Group’s facilities include a maintenance covenant which, if triggered, requires a minimum EBITDA level requirement around 40% of 2020 current consensus Adjusted EBITDA. Customary covenants apply to all other facilities.

The Group’s rolling five-year foreign exchange hedge book continues to provide protection from the recent weakness in sterling to 2025. The Group actively manages risk limits with counterparties providing forward foreign exchange contracts and the current weakness in sterling has led to the rebasing of a number of contracts, resulting in the acceleration of cash flows from these contracts to the benefit of Drax.

Contracted power sales

As at 16 April 2020, the power sales contracted for 2020, 2021 and 2022 were as follows:

 202020212022
Power sales (TWh) comprising:16.79.64.3
– Fixed price power sales (TWh) 17.110.14.3
Of which CfD unit (TWh)3.8
At an average achieved price (£ per MWh)53.249.448
– Gas hedges (TWh)-0.4-0.5-
At an achieved price (pence per therm)1.732-

Merchant power prices remain an important part of the Group’s earnings, but by focusing on flexible, renewable and low-carbon generation, which includes index-linked renewable schemes, capacity payments and system support services, the impact of power prices has reduced.

Exposure to merchant power prices by generation asset class

  • Biomass CfD – power produced by this unit is remunerated based on an index-linked strike price and underpinned by a private law contract which runs until March 2027. At baseload the unit is expected to produce over 5TWh per year. The current strike price is c.£116/MWh and taken together with a biomass cost at or below c.£75/MWh gives a margin of over £40/MWh and an annual contribution to gross profit of over £200 million, with daily cash settlement in 30 days
  • Biomass ROC – ROC buyout prices are index-linked and extend to March 2027, acting as a premium on UK power prices. The buyout price for the current compliance period is £50.05 per ROC. Annual generation is in the region of 9-10 TWh, with the associated power sold up to two years forward, providing strong earnings visibility over the period 2020-21
  • Hydro – a small but profitable volume of merchant power generation (144MW) with zero fuel cost
  • Pumped storage – operates in the system support services market and carries little net exposure to merchant power prices
  • Coal – commercial generation will end in March 2021, ahead of which date Drax will utilise its residual coal stock to realise further cash flows
  • Gas – the Group’s mid-merit CCGT(7) assets have power forward sales for 2020. To the extent that gas prices continue to set the price of power, the clean spark spread from these assets is expected to be maintained at or around current levels in future periods
Engineer working in PPE at Rye House Power Station in Hertfordshire

Engineer working in PPE at Rye House Power Station in Hertfordshire [Click to view/download]

Investment in biomass to increase capacity and reduce cost

Biomass sustainability remains at the heart of the Group’s activities and building a long-term future for sustainable biomass remains the Group’s strategic objective. Drax remains focused on reducing biomass costs to a level which makes biomass generation in the UK economically viable when the existing renewable schemes end in 2027.

Innovation engineer looks up at flue gas desulphurisation unit. The massive pipe above him could be used to transport more than 90% of the carbon captured in the BECCS power generation process.

An engineer looks up at flue gas desulphurisation unit (FGD) at Drax Power Station. The massive pipe would transport flue gas from the Drax boilers to the carbon capture and storage (CCS) plant for CO2 removal of between 90-95%. [Click to view/download]

The Group is targeting five million tonnes of self-supply capacity by 2027 (1.5 million today, plus 0.35 million tonnes in development), with greater scope for operational leverage and cost reduction. These savings will be delivered through further optimisation of existing biomass operations, greater utilisation of low-cost wood residues and an expansion of the fuel envelope to incorporate other low-cost renewable fuels across its expanded self-supply chain. Drax remains alert to sector opportunities for organic and inorganic growth.

By 2027 these activities would enable Drax to develop a biomass generation business operating without the current renewable schemes and potentially the development of BECCS(8), subject to the right support from the UK Government. Drax notes the incremental progress and support announced for carbon capture and storage at the UK Government’s Budget in March 2020.

These efforts support the Group’s ambition to become a carbon negative company by 2030.

In addition, the Group is exploring options to service biomass demand in other markets – Europe, North America and Asia.

Capital allocation and dividend

The Group remains committed to its capital allocation policy established in 2017, through which it aims to maintain a strong balance sheet; invest in the core business; pay a sustainable and growing dividend and return surplus capital beyond investment requirements.

A final dividend of 9.5 pence per share in respect of 2019 performance was proposed at the 2019 Full Year Results on 27 February 2020 and, subject to shareholder approval at today’s Annual General Meeting, will be paid on 15 May 2020.

An interim dividend of 6.4 pence per share was paid in October 2019, making the total dividend in relation to 2019 performance 15.9 pence per share.

In determining the continued appropriateness of the dividend, the Board has considered a range of factors – trading performance, current liquidity, the outlook for the year in the context of Covid-19, as well as the steps being taken to support all stakeholders. The Board believes payment of the final dividend remains consistent with the Group’s commitment to stakeholders.

Drax will update on its expectations for the 2020 full year dividend at the 2020 interim results on 29 July 2020.

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 1757 612 491

Media:

Drax External Communications: Ali Lewis

+44 (0) 7712 670 888

Website: www.drax.com/northamerica

END

Responsibility, wellbeing and trust during the COVID-19 outbreak

Engineers in PPE working at Drax Power Station

We are living through unprecedented times. Coronavirus is having far reaching effects on all industries not just here in the UK, but around the world. At Drax, we take our responsibilities as a member of critical national infrastructure and as an essential service provider very seriously. We are committed to maintaining a continuous, stable and reliable electricity supply for millions of homes and businesses in the UK.

The wellbeing of our people

Firstly, I’d like to thank our employees, contractors, supply chain workers and their families as well as the communities in the UK and US in which we operate, for their fantastic support and continued hard work during these difficult and uncertain times. Our employees’ health and wellbeing are vital, and we’re working hard to ensure we are supporting them with both their physical and mental health, whether working at home or at one of our sites.

Engineer maintaining equipment in Drax Power Station

Engineer maintaining equipment in Drax Power Station [Click to view/download]

Across all our sites we are have implemented strategies to reduce the chances of people spreading the virus and have operational plans in place to ensure continued delivery of power into the grid.

Power station resilience

At Drax Power Station, the UK’s largest power station, largest decarbonisation project in Europe and biggest source of renewable power into the national grid, we have arranged for the separation of key operational teams and employees so that they are physically distanced from each other. We have moved as many employees as possible to work from home, so that there are fewer people in our workplaces reducing the risk of the spread of infection, should it arise. We have strict controls on visitors to the site and on our contractors and suppliers. Our resilience teams are working well and we have contingency plans in place to manage risks associated with colleague absences.

We have closed the visitor centres at Cruachan pumped storage hydro power station and Tongland hydro power station in Scotland, as well as at Drax Power Station in North Yorkshire. We have also stopped all but critically important travel between our sites.

Our supply chain

Sustainable biomass wood pellets destined for Drax Power Station unloaded from the Zheng Zhi bulk carrier at ABP Immingham [Click to view/download]

It is vital we maintain a resilient supply chain for the sustainably sourced biomass wood pellets required to produce electricity at Drax Power Station, the country’s largest power station. We’re working closely with our suppliers in the US and Europe to maintain biomass supplies as well as with rail and port infrastructure in the US and UK to ensure continuity of supply.

Just last week Associated British Ports (ABP) and Drax received and unloaded the largest ever shipment of sustainable biomass to arrive at the Port of Immingham in the UK’s Humber region. The vessel transported 63,907 tonnes of Drax’s wood pellets from the US Port of Greater Baton Rouge in Louisiana. The consignment supplies Drax Power Station with enough renewable fuel to generate electricity for 1.3 million homes.

Our three wood pellet manufacturing plants are running well, with US authorities classifying our employees as key workers. The same is the case for our rail freight partners on both sides of the Atlantic. In the UK, GB Railfreight recognises the strategic importance of biomass deliveries to Drax Power Station.

Our customers

Businesses – both large and small – are feeling the economic effects of this virus. Our employees involved with the supply of electricity, gas and energy services to organisations are working hard to support them. More information can be found via these links:

We are working closely with BEIS, HM Treasury and our trade associations to explore how government and industry can further support business through this challenging time. Organisations facing financial difficultly can access the unprecedented level of support already announced by the Chancellor, Rishi Sunak via:

Drax employee in high visibility clothing on the telephone

Drax employee in high visibility clothing on the telephone [Click to view/download]

Leadership

Our Executive Committee is meeting regularly via video conference to discuss our contingency planning as the situation changes. We are working closely with the UK, US state and Canadian governments, National Grid and Ofgem to ensure that we remain up to date with the latest advice and that we are prepared for any further escalation.

This is an unprecedented time for the UK and the world. Rest assured that Drax’s critical national infrastructure and essential service operations, as well as its employees, are working hard 24/7 to make sure individuals, families, businesses and organisations are supplied with the vital electricity needed to keep the country running.