Author: Alice Roberts

Mailing of the Annual Report and Accounts 2020 and ancillary documents to shareholders

Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)
RNS Number : 6407S

The following documents have been mailed to the registered shareholders of Drax Group plc:

  • Annual Report and Accounts 2020;

  • Notice of the 2021 Annual General Meeting; and

  • Form of Proxy for the 2021 Annual General Meeting.

In accordance with Listing Rule 9.6.1 a copy of each of these documents will shortly be available for viewing on the National Storage Mechanism.

The Annual Report and Accounts 2020 and the Notice of the 2021 Annual General Meeting will also shortly be available as follows:

  • for viewing on the Company’s website, www.drax.com/uk; and/or
  • by writing to the Company Secretary at the Registered Office; Drax Power Station, Selby, North Yorkshire YO8 8PH.

Annual General Meeting

The Company is to hold its Annual General Meeting (AGM) at 11.30am on Wednesday 21 April 2021, at 8-10, The Lakes, Northampton NN4 7YD.

In light of Covid-19 restrictions and current prohibitions on public gatherings, attendance at the AGM shall be restricted and therefore shareholders are strongly encouraged to vote electronically or to vote by proxy.

However, despite the current exceptional circumstances, the Directors are keen to maintain engagement with shareholders. Shareholders can therefore join the meeting and submit questions by logging on to web.lumiagm.com. A user guide detailing the arrangements to join and submit questions at the meeting is set out in the Notice of AGM.

Key dates relating to the proposed final dividend

Detailed below are the key dates regarding the proposed final dividend:

  • 22 April 2021 – ordinary shares marked ex-dividend.
  • 23 April 2021 – record date for entitlement to the dividend.
  • 14 May 2021 – payment date for the dividend.

The proposed rate of the final dividend is 10.3 pence per share.

Brett Gladden
Company Secretary
18 March 2021

The jobs and careers supporting the UK’s net zero future

In October last year several of our employees, from policy managers to apprentices, took over the Energy UK Young Energy Professional (YEP) Forum’s Twitter account to share their experiences so far working in the energy industry and their roles at Drax. The YEP forum consists of a network of energy industry professionals with less than 10 years’ experience, and aims to provide them with opportunities to collaborate, develop and recognise successes. The following insights from employees at Drax show the importance of our workforce in achieving our ambition and what they have learnt so far about starting a career in the energy industry.

Engineer working in the turbine hall at Drax Power Station, North Yorkshire

Meet Samuel, the apprentice

One of our technical apprentices, Samuel Plumb, explains why he decided to kick-start his career with a Drax apprenticeship plus what the selection process involves: “I applied for this role because it’s a mix of practical skills and problem-solving. Drax has a large site with a huge range of equipment and processes so no two days are the same. Working here appealed to me because I’m really interested in the power industry and Drax plays a key role in generation. I found out about this apprenticeship through online research, submitted an application, completed aptitude tests online, sat another aptitude test on-site and then eventually attended an interview.”

Meet Richard, the policy manager

Richard Gow explains that with the right policies in place, Drax could become a carbon negative power station, enabling a zero carbon industrial cluster in the Humber region. The Drax Group Policy and Government Relations Manager outlines how his role helps to develop the necessary frameworks: “I engage with policymakers, advisors and experts across the UK to understand the policy and political landscape and how this could impact Drax’s commercial objectives. The energy sector is at the forefront of decarbonisation and it’s exciting to be involved in developing policies and market frameworks to support this transition to net zero.”

By investing in bioenergy with carbon capture and storage (BECCS), hydrogen and other green technologies in the Humber, industry can regain a competitive edge. New jobs can help to rejuvenate communities and the wider region, as evidenced by a recent report from Vivid Economics on the socio-economic benefits of BECCS. This investment at Drax supports the UK’s levelling up agenda and to Build Back Better, emphasising the need for the UK to have a skilled workforce to achieve net zero. Will Gardiner, CEO of Drax Group, has explained how our own ambitions will also boost our communities and local economies by “helping to create a cleaner environment for future generations whilst creating new jobs and export opportunities for British businesses.”

Noting that BECCS at Drax is not just limited to new engineering or technician roles, as a UK-US company, with sites from Selby to the Scottish Highlands to Louisiana and Mississippi in the US South, we continue to attain young professionals and apprentices across a wide-range of departments, including sustainable business and smart energy services.

Engineer below Cruachan Power Station dam

Engineer below Cruachan Power Station dam

Meet Emma, the renewables engagement officer

And at Drax we emphasise that now is the time for action to tackle climate change. Emma Persson, Renewables Engagement Officer, describes her motivations for joining the clean energy transition and how her role is helping to ensure the UK reaches its net zero target: “As a recent graduate with a Masters in energy and society, I wanted to work in the energy sector and be part of its real and current transition to mitigating climate change instead of contributing to it. This is an exciting time, and my part in this transformation involves stakeholder engagement and contributing to Drax’s climate policy to ensure we reach our carbon negative ambition.”

By developing talent within schools from a young age and inspiring students to study Science, Technology, Engineering and Maths (STEM) subjects, Drax also encourages future career opportunities. We are proud to be working with a number of local schools and colleges, such as Selby College, with whom we recently signed a new five-year partnership. This shows our continued commitment to ensuring students of all ages are equipped with the skills needed to progress the UK’s cleaner energy future, while having a positive social impact on our local communities.

Mobilising a Million

Students from Selby College collect their laptops donated by Drax (April 2020)

We recently became the UK’s first energy company to announce an initiative to improve employability for a million people by 2025. Drax’s Opportunity Action Plan is in partnership with the Social Mobility Pledge, led by the former Education Secretary, the Rt Hon Justine Greening. Through our ‘Mobilising a Million’ initiative, we aim to connect with one million people by 2025, improving skills, education, employability and opportunity. This sets a new and higher standard for the levelling up agenda in Britain, with a wider focus on environmental, social and corporate governance (ESG) issues. Clare Harbord, Drax Group Director of Corporate Affairs, said of the initiative, “By boosting education, skills and employability opportunities for a million people, we can start to level the playing field and build a more diverse workforce. This will make the energy sector stronger and able to make a more significant contribution to the UK’s green recovery.”

During the COVID-19 pandemic we have also been using virtual resources to provide new ways of learning from home, delivering laptops for learners, and a new series of webinars titled ‘Drax in the Classroom’ as well as virtual work experience and tours of Drax Power Station, North Yorkshire and Cruachan in Scotland. Before the pandemic, we also hosted a number of inspiring careers events at Drax, including the ‘Women of the Future’. The event showcased the various opportunities available for young women, part of our continued efforts to increase diversity in our workforce and develop the future generation of energy professionals.

Learn more about careers at Drax and our current opportunities here.

Completion of sale of gas assets

RNS Number: 4567N
Drax Group PLC
(“Drax”, “the Group”, “Drax Group”, “the Company”; Symbol: DRX)

Drax Group plc is pleased to announce that it has completed the sale of Drax Generation Enterprise Limited, which holds four Combined Cycle Gas Turbine (“CCGT”) power stations, to VPI Generation Limited.

Following the sale Drax no longer operates any CCGTs and on 31 March 2021 will end commercial coal generation, with formal closure of its remaining coal assets in September 2022.

Enquiries:

Drax Investor Relations: Mark Strafford
+44 (0) 7730 763 949

Media:

Drax External Communications: Ali Lewis
+44 (0) 7712 670 888

Website: www.Drax.com

END

What is a biomass wood pellet?

However, by compressing organic matter like wood, forest residues and sawdust into energy-dense pellets, biomass can be used for heating or renewable bioenergy generation at a much greater scale.

Why are pellets powerful?

The advantage of using biomass in the form of a pellet is its energy density. This refers to the amount of energy that can be stored in a given amount of a material.

On their own the wood and residues like wood chips and sawdust that make up biomass do not have a high energy density. A kilogram of wood, for example, stores little energy, compared to fuels like coal, diesel or uranium.

However, by compressing forest industry residues into a pellet, biomass becomes significantly more energy dense. Wood pellets can also have very low moisture content, giving them a high combustion efficiency – an important feature in power generation.

How are biomass pellets made?

Biomass pellets are made at a pelletisation plant. Here wood that is unsuitable for other industries like sawmill residues, are brought together.

The wood is chipped, screened for quality, heated to reduce its moisture content to below 12% and then converted into a fine powder. This is then pressed through a grate at high pressure to form the solid, short, dense biomass pellet.

How are pellets used in power generation?

Biomass pellets can be used to generate power in a similar way to coal, allowing existing coal power stations to be transformed to use renewable bioenergy instead.

A conveyor system takes pellets from storage through to pulverising mills, where they are crushed into a fine powder that is then blown into the power station’s boiler. Here the biomass is combusted as fuel, the heat from this combustion is used to make steam which powers the generators that produce electricity.

Biomass pellets’ density and uniform shape also makes them easier to transport and store in large quantities. However, it is essential that they are kept dry while in transit and that when stored in biomass domes the atmospheric conditions are carefully monitored and controlled to prevent unwanted combustion.

Biomass pellet facts

Are biomass pellets renewable? 

When forests are sustainably managed, and trees naturally regenerated or replanted and regrown in a human timeframe, it makes the biomass pellets sourced from them renewable.

It’s vital for the long-term energy generation that biomass pellets are sourced from responsibly managed forests and other industries that protect the environment and do not contribute to deforestation. Sourcing decisions must be science-based and not adversely affect the long-term potential of forests to store and sequester carbon.

Sustainable wood pellets are considered to be carbon neutral at the point of combustion. As they grow, forests absorb carbon from the atmosphere. When a biomass pellet is combusted, the same amount of atmospheric CO2 is released. The overall amount of CO2 in the atmosphere remains neutral, unlike with fossil fuels which release ancient carbon that has long fallen out of the natural carbon cycle.

Because sustainable bioenergy is low carbon when its lifecycle emissions, including supply chain CO2, are factored in, it is possible to turn it into a source of negative emissions, with the addition of carbon capture technology.

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What is electricity trading?

What is electricity trading?

Electricity trading is the process of power generators selling the electricity they generate to power suppliers, who can then sell this electricity on to consumers. The system operator – National Grid ESO in Great Britain – oversees the flow of electricity around the country, and ensures the amounts traded will ultimately meet demand and do not overwhelm the power system.

Who is involved in electricity trading?

There are three main parties in a power market: generators (thermal power plants and energy storage sites, sources such as wind turbines and solar panels producing electricity), consumers (hospitals, transport, homes and factories using electricity), and suppliers in the middle from whom you purchase electricity.

Electricity is generated at power stations, then bought by suppliers, who then sell it on to meet the needs of the consumers.

Electricity trading refers to the transaction between power generators, who produce electricity, and power suppliers, who sell it on to consumers.

How are electricity contracts made?

Electricity trading occurs in both long- and short-term time frames, ranging from years in advance to deals covering the same day. Generation and supply must meet exact demand for every minute of the day, which means that traders must always be ready to buy or sell power to fill any sudden gaps that arise.

When trading electricity far in advance, factors such as exchange rates, the cost and availability of fuel, changing regulations and policies all affect the price. Short-term price is more volatile, and factors such as weather, news events and even what’s on television having the biggest impact on price. 

Traders analyse live generation data and news reports, to predict ahead of time how much electricity will be needed during periods of high demand and then determine a price. Traders then make offers and bids to suppliers and strike a deal – these deals then dictate how and when a power station’s generators are run every day.

Why is electricity trading important?

Running a power station is an expensive process and demand for electricity never stops.  The electricity market ensures the country’s power demands are met, while also aiming to keep electricity businesses sustainable, through balancing the price of buying raw materials with the price at which electricity is sold.

To ensure the grid remains balanced and meets demand, the systems operator also makes deals with generators for ancillary services, either far in advance, or last-minute. This ensures elements such as frequency, voltage and reserve power are kept stable across the country and that the grid remains safe and efficient.

Electricity trading ensures there is always a supply of power and that the market for electricity operates in a stable way

Electricity trading fast facts  

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What is renewable energy?

These differ to non-renewable energy sources such as coal, oil and natural gas, of which there is a finite amount available on Earth, meaning if used excessively they could eventually run out.

Renewable resources can provide energy for a variety of applications, including electricity generation, transportation and heating or cooling.

The difference between low-carbon, carbon neutral and renewable energy

Renewables such as wind, solar and hydropower are zero carbon sources of energy because they do not produce any carbon dioxide (CO2) when they generate power. Low-carbon sources might produce someCO2, but much less than fuels like coal.

Bioenergy that uses woody biomass from sustainably managed forests to generate electricity is carbon neutral because forests absorb CO2 from the atmosphere as they grow, meaning the amount of CO2 in the atmosphere remains level. Supply chains that bring bioenergy to power stations commonly use some fossil fuels in manufacturing and transportation. Therefore woody biomass is a low carbon fuel, when its whole lifecycle is considered.

Managing forests in a sustainable way that does not lead to deforestation allows bioenergy to serve as a renewable source of power. Responsible biomass sourcing also helps forests to absorb more carbon while displacing fossil fuel-based energy generation.

Nuclear is an example of a zero carbon source of electricity that is not renewable. It does not produce CO2,but it is dependent on uranium or plutonium, of which there is a finite amount available.

Managing forests in a sustainable way that does not lead to deforestation allows bioenergy to serve as a renewable source of power.

How much renewable energy is used around the world?

Humans have harnessed renewable energy for millions of years in the form of woody biomass to fuel fires, as well as wind to power ships and geothermal hot springs for bathing. Water wheels and windmills are other examples of humans utilising renewable resources, but since the industrial revolution fossil fuels, coal in particular, have been the main source of power.

However, as the effects of air pollution and CO2 produced from burning fossil fuels become increasingly apparent, renewable energy is gradually replacing sources which contribute to climate change.

In the year 2000 renewable energy accounted for 18% of global electricity generation, according to the IEA. By 2019, renewable sources made up 27% of the world’s electrical power.

Why renewable energy is essential to tackling climate change

The single biggest human contribution to climate change is greenhouse gas emissions, such as CO2, into the atmosphere. They create an insulating layer around the planet that causes temperatures on Earth to increase, making it less habitable.

Renewable sources of electricity can help to meet the world’s demand for power without contributing to global warming, unlike carbon-intensive fuels like coal, gas and oil.

Bioenergy can also be used to remove CO2 from the atmosphere while delivering renewable electricity through a process called bioenergy with carbon capture and storage (BECCS).

Forests absorb CO2 from the atmosphere, then when the biomass is used to generate electricity the same CO2 is captured and stored permanently underground – reducing the overall amount of CO2 in the atmosphere.

Humans have used renewable energy for millions for years, from wood for fires to wind powering boats to geothermal hot springs. 

What’s holding renewables back?

The world’s energy systems were built with fossil fuels in mind. This can make converting national grids difficult and installing new renewable energy sources expensive. However, as knowledge grows about how best to manufacture, build and operate renewable systems, the cost of deploying them at scale drops.

There are future changes needed. Renewables such as wind, solar and tidal power are known as intermittent renewables because they can’t generate electricity when there is no sun, wind or the tidal movement. For future energy systems to deliver enough power, large scale energy storage, as well as other flexible, reliable forms of generation will also be needed to meet demand and keep systems stable.

Renewable energy key facts:  

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