LONDON (dpa-AFX) - Drax Group plc (DRX.L) reported that the UK Government has published a statement which sets out the key elements of a non-binding heads of terms for a low-carbon dispatchable CfD agreement for Drax Power Station. The statement proposes a CfD mechanism, which is available to all four biomass units at DPS, with a four-year term from Apr-27 to Mar-31.
Drax said it is targeting average adjusted EBITDA from Drax Power Station of 100-200 million pounds pa during the agreement period, which is inclusive of a gain share mechanism. Separate to biomass generation, the Group is continuing to target over 500 million pounds of post 2027 adjusted EBITDA from FlexGen and Pellet Production.
'Analysis from Baringa indicates the proposed agreement will result in a 1.6-3.1 billion pounds reduction in electricity system costs, versus the construction of new fossil fuel power stations, and Government has concluded today that Drax offers the lowest cost option for bill payers during this period,' said Drax Group CEO, Will Gardiner.
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