Tag: about us

Directorate Change

8 April 2020

Investors
Biomass wood pellet storage dome, Drax Power Station

RNS: 1329J
Drax Group plc
(“Drax” or the “Company”; Symbol:DRX)

Drax Group plc (the “Company”) is today announcing that Andy Koss, Chief Executive, Generation, Drax Group, resigned as a Director of the Company on 7 April 2020 and his service agreement with Drax Power Limited will terminate by reason of redundancy on 30 June 2020. His departure is part of the transition of a new executive management structure for the Generation business of the Company. Mr Koss will not seek re-election as an executive director of the Company at the forthcoming AGM being held on 22 April 2020.

Andy Koss

Andy Koss [Click to view/download]

In accordance with section 430(2B) of the Companies Act 2006, details of payments made to and receivable by Mr Koss after he ceases to be a director will shortly be available on the Drax website. All payments made to and receivable by Mr Koss are consistent with the Company’s Directors’ Remuneration Policy, and full details will be disclosed in the Remuneration Report within the Company’s Annual Report and Accounts for the year ending 31 December 2020.

Philip Cox

Philip Cox [Click to view/download]

Philip Cox, Chair, commented:

“On behalf of the Board I would like to thank Andy for his 15 years’ service at Drax, during which time he has made a major contribution to the transformation of Drax into a leading generator and supplier of renewable energy. We wish Andy the very best for the future.”

For further information, please contact:

Brett Gladden, Company Secretary
+44 (0)7936 362586
[email protected]

Notice of Full Year Results announcement, presentation and webcast arrangements

19 February 2020

Investors
Drax Group CEO Will Gardiner
RNS Number : 3963D
Drax Group PLC

Information regarding the results presentation meeting and webcast is detailed below.

Results presentation meeting and webcast arrangements

Management will host a presentation for analysts and investors at 9:00am (UK Time), Thursday 27 February 2020, at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. 

Would anyone wishing to attend please confirm by e-mailing [email protected] or calling Rosie Corbett at FTI Consulting on +44 (0) 20 3727 1718

The meeting can also be accessed remotely via a live webcast, as detailed below. After the meeting, the webcast will be made available and access details of this recording are also set out below.

A copy of the presentation will be made available from 7:00am (UK time) on Thursday 27 February 2020 for download at: https://www.drax.com/investors/results-reports-agm/#investor-relations-presentations

Event Title: Drax Group plc: Full Year Results

Event Date: Thursday 27 February 2020, 9:00am (UK time)

Webcast Live Event Link: https://secure.emincote.com/client/drax/drax005

Start Date: Thursday 27 February 2020

Delete Date: Thursday 31 December 2020

Archive Link: https://secure.emincote.com/client/drax/drax005                                            

For further information please contact [email protected] on +44 (0) 20 3727 1718

Website: www.drax.com

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

END

Investment programme in biomass capacity expansion and cost reduction

19 November 2019

Investors
Woodchips and sawmill residue at Drax LaSalle Bioenergy in Louisiana, September 2019

Highlights

  • Targeting biomass self-supply capacity of five million tonnes by 2027
    • 1.5 million tonnes of existing capacity, plus 0.35 million tonnes of low-cost capacity announced at the 2019 half year results
    • Evaluating options for a further three million tonnes over the next seven years
    • Supports target to reduce biomass cost by c.30 percent to c.£50/MWh
    • Targeting returns significantly in excess of the Group’s cost of capital
  • Trading update – in-line with expectations
    • Acquired assets performing strongly
    • Capacity Market restored and included in 2019 Adjusted EBITDA(1)

Will Gardiner, Drax Group CEO, said:

“Drax’s purpose is to enable a zero-carbon lower cost energy future. We believe sustainable biomass has a long-term critical role to play. That’s why we plan to supply 80 percent of our biomass from our own sources – a significant increase on the 20 percent we currently self-supply. Supplying more of our own biomass will cut costs and reduce supply chain risks, ensuring our biomass power generation remains viable in the long term. When combined with carbon capture it will also enable negative emissions, helping the UK on its path to net zero by 2050.”

Will Gardiner, CEO, Drax Group

Will Gardiner, CEO, Drax Group. Click to view/download in high res.

Capital Markets Day

Drax is today hosting a Capital Markets Day for investors and analysts.

Will Gardiner and his management team will update on how the Group is delivering on its purpose. The day will outline the significant opportunities Drax sees in growing its biomass supply and renewable generation businesses.

Investment in biomass to increase capacity and reduce cost

As a part of the Group’s key strategic objective of building a long-term future for sustainable biomass, Drax remains focused on opportunities to reduce its cost of biomass to a level which is economic without subsidy in 2027.

These savings will be delivered through further optimisation of existing biomass operations and greater utilisation of low-cost wood residues; an expansion of the fuel envelope to incorporate other renewable fuels and; a significant expansion of self-supply capacity.

Drax 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. Drax will continue to work with its current suppliers to develop its portfolio.

At the 2019 half year results, Drax announced an investment in low-cost capacity at its existing three sites in the US Gulf, adding 350k tonnes of new capacity by 2021. The capital cost is in the region of £50 million, enabling targeted fuel cost savings in excess of £15/MWh on the additional capacity once commissioned.

Drax is evaluating options to deliver an additional three million tonnes of capacity. These options are expected to deliver returns significantly in excess of the Group’s cost of capital, with strong cash flow generation and a fast payback.

These activities would enable Drax to develop an unsubsidised biomass generation business by 2027, with the option to service wood pellet demand in other markets – Europe, North America and Asia.

Biomass sustainability is at the heart of the Group’s activities and Drax has implemented industry leading processes which support this expansion, encourage forest growth and make a positive contribution to climate change.

Drax LaSalle BioEnergy wood pellet plant in Louisiana

Drax LaSalle BioEnergy wood pellet plant in Louisiana is now co-located with a sawmill. A new rail spur became operational at LaSalle earlier in 2019. Click to view/download.

Options for gas generation

Drax continues to see flexible gas generation as an enabler of greater renewable and low carbon generation, in addition to supporting the development of hydrogen.

Any investment decision would reflect Drax’s objective of delivering earnings visibility and be underpinned by a 15-year capacity agreement to support a low double-digit rate of return. Drax would consider a range of funding options, including partnerships, consistent with Drax’s balance sheet objective of around 2 x net debt to Adjusted EBITDA(1) over time.

Capital allocation and dividend

Drax remains committed to the capital allocation policy established in 2017.

Trading and operational performance

The performance of the assets acquired from Iberdrola in December 2018 has been strong, particularly the pumped storage business which has performed well, driven by the system support market. Drax reiterates the Adjusted EBITDA(1) guidance provided at the time of acquisition, of £90-£110 million in the 2019 financial year.

In July, Drax completed the refinancing of the acquisition bridge facility used to acquire these assets. These facilities now extend the Group’s debt maturity profile to 2029, adding an ESG(2) facility with a mechanism that adjusts the margin based on Drax’s carbon emissions against an annual benchmark. The Group’s cost of debt is now below four percent and below three percent on the new facilities, reflecting the Group’s reduced business risk. The Group continues to identify opportunities to optimise its balance sheet and cash flow.

During the summer, Drax completed major planned outages on two biomass units. Following a delayed return to service, the plan is to run all four ROC(3) units at high utilisation levels in the fourth quarter of 2019.

The outlook for coal generation remains challenging and Drax continues to monitor the situation with regards to future operation, noting that all unabated UK coal generation must close by 2025.

Following formal confirmation from the UK Government, Drax expects the Capacity Market to be re-instated shortly, with full retrospective payments made for the capacity provided. Capacity payments due to Drax for 2019 and since the suspension of the Capacity Market in 2018 are £75 million. Drax expects these to be included in 2019 Adjusted EBITDA(1), with cash settlement in January 2020.

These factors underpin the Group’s expectations for full year Adjusted EBITDA(1), which remain unchanged and around 2 x net debt to Adjusted EBITDA(1) when adjusted to reflect cash payment of retrospective capacity payments received in January 2020.

Capital Markets Day webcast and presentation material

The event will be webcast from 9.30am and the material made available on the Group’s website at the same time. Joining instructions for the webcast and presentation are included in the links below.

https://view-w.tv/3-1479-22819/en

https://www.drax.com/investors/capital-markets-day/

Notes:

(1) Earnings before interest, tax, depreciation, amortisation, excluding the impact of exceptional items and certain remeasurements.

(2) Environmental Social and Governance.

(3) Renewable Obligation Certificate.

Enquiries:

Drax Investor Relations:
Mark Strafford

+44 (0) 1757 612 491

Media:

Drax External Communications:
Matt Willey

+44 (0) 203 943 4306

Website: www.drax.com

END

RNS Number: 8192T

View announcement in PDF format

Reapproval of UK Capacity Market

24 October 2019

Investors
Drax Power Station

Following formal confirmation from the UK Government, Drax expects the Capacity Market to be re-instated shortly, with full retrospective payments made for the capacity provided. Capacity payments due to Drax for 2019 and since the suspension of the Capacity Market in 2018 are £75 million. Drax expects these to be included in 2019 EBITDA.

Drax expects the decision will allow future Capacity Market auctions to take place in early 2020. Drax retains options for new gas generation, which could be developed subject to appropriate clearing prices in future Capacity Market auctions.

A link to the European Commission’s decision is provided below.

https://europa.eu/rapid/press-release_IP-19-6152_en.htm

Will Gardiner, Drax Group CEO said:

“This is great news for the UK energy system. The capacity market helps to ensure Britain has the flexible and reliable power generating capacity needed to support the economy as it continues to decarbonise, keeping the lights on at the lowest cost for millions of homes and businesses.

“We will be prequalifying a number of Drax’s flexible and reliable power stations, as well as some of our development projects, later this year with a view to participating in the capacity markets auctions in 2020.”

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 1757 612 491

Media:

Drax External Communications: Matt Willey

+44 (0) 203 943 4306

Website: www.drax.com

END

RNS Number : 0491R

Climate change is the biggest challenge of our time

Will Gardiner, Chief Executive Officer, Drax Group

28 July 2019

Opinion
Drax Group CEO Will Gardiner

Climate change is the biggest challenge of our time and Drax has a crucial role in tackling it.

All countries around the world need to reduce carbon emissions while at the same time growing their economies. Creating enough clean, secure energy for industry, transport and people’s daily lives has never been more important.

Drax is at the heart of the UK energy system. Recently the UK government committed to delivering a net-zero carbon emissions by 2050 and Drax is equally committed to helping make that possible.

We’ve recently had some questions about what we’re doing and I’d like to set the record straight.

How is Drax helping the UK reach its climate goals?

At Drax we’re committed to a zero-carbon, lower-cost energy future.

And we’ve accelerated our efforts to help the UK get off coal by converting our power station to using sustainable biomass. And now we’re the largest decarbonisation project in Europe.

We’re exploring how Drax Power Station can become the anchor to enable revolutionary technologies to capture carbon in the North of England.

And we’re creating more energy stability, so that more wind and solar power can come onto the grid.

And finally, we’re helping our customers take control of their energy – so they can use it more efficiently and spend less.

Is Drax the largest carbon polluter in the UK?

No. Since 2012 we’ve reduced our CO2 emissions by 84%. In that time, we moved from being western Europe’s largest polluter to being the home of the largest decarbonisation project in Europe.

And we want to do more.

We’ve expanded our operations to include hydro power, storage and natural gas and we’ve continued to bring coal off the system.

By the mid 2020s, our ambition is to create a power station that both generates electricity and removes carbon from the atmosphere at the same time.

Does building gas power stations mean the UK will be tied into fossil fuels for decades to come?

Our energy system is changing rapidly as we move to use more wind and solar power.

At the same time, we need new technologies that can operate when the wind is not blowing and the sun is not shining.

A new, more efficient gas plant can fill that gap and help make it possible for the UK to come off coal before the government’s deadline of 2025.

Importantly, if we put new gas in place we need to make sure that there’s a route through for making that zero-carbon over time by being able to capture the CO2 or by converting those power plants into hydrogen.

Are forests destroyed when Drax uses biomass and is biomass power a major source of carbon emissions?

No.

Sustainable biomass from healthy managed forests is helping decarbonise the UK’s energy system as well as helping to promote healthy forest growth.

Biomass has been a critical element in the UK’s decarbonisation journey. Helping us get off coal much faster than anyone thought possible.

The biomass that we use comes from sustainably managed forests that supply industries like construction. We use residues, like sawdust and waste wood, that other parts of industry don’t use.

We support healthy forests and biodiversity. The biomass that we use is renewable because the forests are growing and continue to capture more carbon than we emit from the power station.

What’s exciting is that this technology enables us to do more. We are piloting carbon capture with bioenergy at the power station. Which could enable us to become the first carbon-negative power station in the world and also the anchor for new zero-carbon cluster across the Humber and the North.

How do you justify working at Drax?

I took this job because Drax has already done a tremendous amount to help fight climate change in the UK. But I also believe passionately that there is more that we can do.

I want to use all of our capabilities to continue fighting climate change.

I also want to make sure that we listen to what everyone else has to say to ensure that we continue to do the right thing.

Acquisition Bridge Facility refinancing completed

24 July 2019

Investors

Private placement

The £375 million private placement with infrastructure lenders comprises facilities with maturities between 2024 and 2029(2).

ESG Facility

The £125 million ESG facility matures in 2022. The facility includes a mechanism that adjusts the margin based on Drax’s carbon emissions against an annual benchmark, recognising Drax’s continued commitment to reducing its carbon emissions as part of its overall purpose of enabling a zero-carbon, lower cost energy future.

Together these facilities extend the Group’s debt maturity profile beyond 2027 and reduce the Group’s overall cost of debt to below 4 percent. 

Enquiries:

Drax Investor Relations:
Mark Strafford
+44 (0) 1757 612 491

Media:

Drax External Communications:
Matt Willey
+44 (0) 7711 376 087 

Website: www.drax.com

Note

(1)  Drax Corporate Limited drew £550 million under an acquisition bridge facility on 2 January 2019 used to partially fund the acquisition of ScottishPower Generation Limited for initial net consideration of £687 million. £150 million of the acquisition bridge facility was repaid on 16 May 2019.

(2)  £122.5 million in 2024, £122.5 million in 2025, £80 million in 2026 and £50 million in 2029.