Source - Alliance News

Drax Group PLC on Tuesday generator maintained yearly guidance and talked up its bioenergy with carbon capture and storage offering in Yorkshire.

The Yorkshire, England-based electricity company expects its adjusted earnings before interest, tax, depreciation and amortisation, before the electricity generator levy, for 2023 to be in line with consensus of £1.16 billion, up 59% from £731 million in 2022 and within the expected range of £1.10 billion to £1.20 billion.

The electricity generators levy is a windfall tax on renewable and low-carbon energy, which came into force on January 1 this year.

The company said it currently has contracted over 17 million tonnes of long-term biomass sales to third parties in Asia and Europe extending to the mid-2030s.

Further, Drax said contracted power sales as at November 30 were at average £169.1 per megawatt hour, and it expects that to fall to £148.0 in 2024 and to £115.3 in 2025.

Meanwhile, it highlighted that in December it signed a letter of intent for the sale of up to one million tonnes of biomass to a ‘major’ European utility, for projects including a biofuel project which is targeting a final investment decision during 2025.

‘With its robust and diversified global supply chain Drax believes that it is well placed to support increased demand for sustainable biomass in a wider range of applications and in doing so create value for stakeholders,’ the company said.

Chief Executive Officer Will Gardiner said: ‘We continue to deliver a strong system support and generation performance, providing dispatchable, renewable power for millions of homes and businesses. Drax Power Station is the UK’s single largest provider of renewable energy by output during 2023 and a critical contributor to the country’s security of supply. We are excited about the opportunity to deliver bioenergy with carbon capture and storage in Yorkshire, which could help the UK meet its net zero targets and continue to support the country’s long-term energy security, whilst creating thousands of new jobs across the region.’

Drax shares rose 1.4% to 449.60 pence each on Tuesday morning in London.

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