Drax Group PLC Trading Update (0238Z)
12 December 2017 - 6:00PM
UK Regulatory
TIDMDRX
RNS Number : 0238Z
Drax Group PLC
12 December 2017
12 December 2017
DRAX GROUP PLC
(Symbol: DRX)
Trading Update
Drax today publishes a trading update for the period from 1 July
2017 to date.
Trading and Operational Performance
Since publishing its half year results on 19 July 2017, trading
conditions in the markets in which Drax operates have remained in
line with expectations.
Generation
A major planned outage on the CfD(1) unit was completed in
November 2017 and the unit has now returned to service. Both
biomass and coal operations are currently performing well.
Retail
Retail operations remain in line with expectations, with the
integration of Opus Energy progressing well and continued
improvement in profitability at Haven Power.
US Biomass Self-supply
At the Morehouse and Amite pellet plants, the installation of a
further 150K tonnes of capacity - allowing access to incrementally
cheaper local wood residues - as part of the previously announced
plans to optimise operations, is now complete.
The third pellet plant at LaSalle began commissioning in
November 2017, with pellets now being produced and an increase in
production scheduled through 2018.
Taking these factors into account and based on good operational
availability for the remainder of the year, our expectations remain
unchanged.
Contracted Power Sales for 2017 and 2018
As at 7 December 2017, the power sales contracted for 2017 and
2018 were as follows:
2017 2018
--------------------------------- ----------- -----------
Power sales (TWh) comprising: 20.1 16.8
- Fixed price power sales (TWh) 20.1 15.9
at an average achieved price at GBP46.9 at GBP44.1
(per MWh)
- Gas hedges (TWh)(2) - 0.9
at an achieved price (per
therm) - 44.4p
--------------------------------- ----------- -----------
Strategy Update
Drax continues to develop options for 1.2GW of new Open Cycle
Gas Turbine (OCGT) capacity, providing peaking power and system
support services to the grid. The first two projects - Progress
Power and Hirwaun Power - will participate in the next capacity
market auction in February 2018. Negotiations for engineering and
construction contracts are progressing well, with competitive
tenders received from a number of providers.
If developed, these projects would be underpinned by a fifteen
year, index-linked capacity market contract, extending earnings
visibility into the 2030s.
Drax also continues to develop options for its remaining coal
assets, including further low cost biomass and coal-to-gas
conversions, the latter of which is progressing through a public
planning consultation.
Through these options for growth and improved earnings Drax
continues its transformation, helping change the way energy is
generated, supplied and used for a better future.
Other Matters
As part of its core market focus Drax completed the sale of
BBE(3) to AMPH(4) in October 2017. Drax retains an equity holding
in AMPH(4) .
Drax will announce its full year results for the year ending 31
December 2017 on 27 February 2018.
Enquiries:
Drax Investor Relations: Mark Strafford
+44 (0) 1757 612 491
Media:
Drax External Communications:
Matt Willey
+44 (0) 1757 612 285
Ali Lewis
+44 (0) 1757 612 165
Website: www.drax.com
Notes:
(1) Contract for Difference.
(2) Structured power sales (and equivalents) include forward gas
sales, providing additional liquidity for forward sales, highly
correlated to the power market and acting as a substitute for
forward power sales.
(3) Billington Bioenergy.
(4) Aggregated Micro Power Holdings.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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