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Drax Group PLC on Wednesday said it signed an agreement with the Low Carbon Contracts Co, a UK government-owned company, for operation of Drax Power Station post 2027. Drax, a Selby, North Yorkshire-based electricity generator, said there were no significant changes from heads of terms agreed in February. The contract period is from April 2027 to March 2031, with a contract for difference scheme with a strike price of £109.90 per megawatt hour applied to all four biomass units. Under the deal, Drax will sell about 6 terawatt hours of power per year against a season ahead reference price. Drax Chief Executive Officer Will Gardiner said: ‘We are pleased to have agreed this new contract with the UK government, which will support UK energy security into the 2030s and deliver a net saving for consumers compared to alternative sources of dispatchable generation. ‘The agreement will support the rollout of intermittent renewable generation across the UK and provides options to ensure Drax Power Station continues to play a long-term role in the regional economy and UK energy system.’ Drax said: ‘The agreement includes enhanced biomass sustainability requirements, including that all biomass used at Drax Power Station is sustainably sourced and verified through monitoring, reporting, and verification requirements, including enhanced auditing of the biomass supply chain. Drax welcomes these enhancements to its existing procedures, which demonstrate the group’s commitment to delivering climate, nature and people positive outcomes.’ Drax shares rose 2.2% to 727.50 pence each on Wednesday morning in London. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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