Tag: COVID-19

Under lockdown, every day is a Sunday

Iain Staffell, Imperial College London

21 May 2020

Opinion
empty UK motorway in England at sunset with no traffic

On March 23rd the UK took an unprecedented move to tackle the coronavirus. Most business that had not already closed moved online, with millions of people now working from home. This had a huge impact on electricity demand: consumption on weekdays fell by 13% to its lowest levels since 1982 – a time when there were 10 million fewer people in the country, and GDP was a third lower than today.

Other regions have seen a similar collapse in electricity demand. Spain, Italy and France have all seen electricity demand fall by 10-15% according to analysis by Ember. Across the Atlantic, New York City has seen similar reductions.

Demand has fallen for a simple reason: with schools and workplaces now closed or running with a greatly reduced staff – machinery, computers, lights and heaters are not drawing power. Electric rail, tram and tube systems are also running a reduced service. On the contrary, with more people at home, household electricity consumption has increased. Octopus Energy estimate that during social distancing (before the stricter lockdown came into effect) homes were consuming up to a third more electricity, adding £20 per month to the typical bill.

The impact of lockdown on Britain’s electricity demand is much like living through a month of Sundays. The average profile for a March weekend day in previous years looks very similar to the daily profile for weekdays since lockdown begun – both in the amount of electricity consumed and the structure. Post-lockdown weekends have even lower demand, tracking 11% below weekday demand.

People no longer have to get up at the crack of dawn for work. On a typical weekday morning, demand would rise by 10 GW over two hours from 5:30 to 7:30 AM. Now it takes more than twice as long – until midday – for this rise to occur. At the other end of the day, there would normally be a small peak in demand around 8 PM from people gathering in pubs and restaurants up and down the country. Both on weekdays and weekends, demand begins falling earlier in the evening as the sofa has become the only available social venue.

urban street cafe empty without visitors

With lower demand comes lower power prices. Wholesale electricity prices are typically 7% lower on Sundays than on weekdays for this reason. March saw the lowest monthly-average power price in 12 years, down one-third on this month last year. Prices were already heading downwards because of the falling price of gas, but the lockdown has amplified this, and negative prices have become commonplace during the middle of the day. There was not a visible impact on carbon emissions during the first quarter of the year, as only the last week of March was affected. However, as lockdown continued into April and May, emissions from power production in Britain have fallen by 35% on the same period last year. The effect is slightly stronger across Europe, with carbon emissions falling almost 40% as dirtier coal and lignite power stations are being turned down.

Will some of these effects persist after lockdown restrictions are eased? It is too early to tell, as it depends on what long-lasting economic and behavioural changes occur. Electricity demand is linked with the country’s GDP, which is set to face the largest downturn in three centuries. Whether the economy bounces back, or is afflicted with a lasting depression will be key to future electricity demand. It will also depend on behavioural shifts. People are of course craving their lost freedoms, many may appreciate not going back to a lengthy daily commute – and the rise of video conferencing and collaboration apps has shown that remote working may finally have come of age. With even a small share of the population continuing to work from home on some days, there could be a lasting impact on electricity demand for years to come.

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In a crisis people come first

Will Gardiner, Chief Executive Officer, Drax Group

14 May 2020

Opinion

This crisis will be remembered for many things. Many are not positive, but some are inspiring. Around the world we’ve seen tremendous acts of kindness and witnessed remarkable resilience from people continuing to live, work and to support one another. The actions we are all taking as individuals, businesses and communities will not only help us get through this crisis, they will shape how we emerge from it.

At Drax we are proud of the ongoing role we’re playing in supporting the UK and its essential services, continuing to generate and supply the electricity needed to keep people healthy and the economy running.

It is what we have always done, and it is what we will continue to do.

This is possible because our people have continued to carry out their important work in these uncertain times safely and responsibly. My leadership team in the UK and US must continue to support them, and we must also support the communities they are a part of.

Employees Drax Power Station show their support and appreciation for the heroic efforts of those within the NHS by turning one of its cooling towers blue at 8pm each Thursday

Employees Drax Power Station show their support and appreciation for the heroic efforts of those within the NHS by turning one of its cooling towers blue at 8pm each Thursday

Our communities are at the core of what we do and who we are. They support our business globally and enable us to supply energy to the country. We have a responsibility to do what we can to help them through this crisis.

To do this we have put together a Covid-19 support package totalling more than three quarters of a million pounds that goes beyond just financing to make a positive impact. I’d like to highlight a few of these.

Supporting communities in Great Britain and the US

The Robinson family collect their laptop at Selby Community Primary School

The closures of schools and the need to turn homes into classrooms has been one of the biggest changes for many families. With children now depending on technology and the internet for schooling, there’s a very real chance those without access may fall behind, with a long term negative impact on their education.

We want to ensure no child is left out. So, we have donated £250,000 to buy 853 new laptops, each with three months of pre-paid internet access, and delivered them to schools and colleges local to our sites across the UK.

This has been implemented by Drax, working closely with headteachers. As one of our local heads Ian Clennan told us: “Schools don’t just provide education – they’re a whole support system. Having computers and internet access means pupils can keep in touch with their teachers and classmates more easily too – which is also incredibly important at the moment.”

In the US, we’re donating $30,000 to support hardship funds for the communities where we operate. Our colleagues in Louisiana are playing an active role in the community, and in Amite County, Mississippi, they have helped provide PPE to first responders as well as supporting charities for the families worse affected.

Helping businesses, starting with the most vulnerable

As an energy supplier to small and medium sized businesses (SMEs), we must act with compassion and be ready to help those who are most economically exposed to the crisis. To do this, we are launching a number of initiatives to support businesses, starting with some of the most vulnerable.

It’s clear that care homes require extra support at this time. We are offering energy bill relief for more than 170 small care homes situated near our UK operations for the next two months, allowing them to divert funds to their other priorities such as PPE, food or carer accommodation.

But it is also important we understand how difficult a period this is for small businesses of all kinds. Many of our customers are facing financial pressure that was impossible to forecast. To help relieve this, we have agreed deferred payment plans with some of our customers who are unable to pay in full. We have also extended current energy prices for three months for 4,000 customers of Opus Energy who have not been able to secure a new contract during this period.

The impact of this crisis will be long term, so we made a significant, two-year charitable donation to Business Debtline. A dedicated phoneline and webpage will be provided to our small businesses customers, offering free debt advice and helping them to recover for the future.

An engineer looks up at flue gas desulphurisation unit (FGD) at Drax Power Station. The massive pipe would transport flue gas from the Drax boilers to the carbon capture and storage (CCS) plant for CO<sub>2</sub> removal of between 90-95%.

An engineer looks up at flue gas desulphurisation unit (FGD) at Drax Power Station. The massive pipe would transport flue gas from the Drax boilers to the carbon capture and storage (CCS) plant for CO2 removal of between 90-95%.

Change for the future recovery

While there is still uncertainty around how the UK, the US and the world will emerge from the pandemic it is the responsibility of the whole energy industry to show compassion for its customers and to take the actions needed to soften the economic blow that Covid-19 is having across the globe.

The disruption to normal life caused by the pandemic has changed how the country uses electricity overnight. In the coming weeks we will be publishing a more in-depth view from Electric Insights showing exactly what effect this has had and what it might reveal for the future of energy.

No matter what that future holds, however, we will remain committed to enabling a zero carbon, lower cost energy future. This will mean not only supporting our people, our communities and our countries through the coronavirus crisis, but striving for a bright and optimistic future beyond it. A future where people’s immediate health, safety and economic wellbeing are prioritised alongside solutions to another crisis – that of climate change.

Robust trading and operational performance; 2020 Adjusted EBITDA currently in line with consensus; delivering for all stakeholders

22 April 2020

Investors
Drax employee in PPE in front of biomass storage dome

RNS Number : 4161K
Drax Group plc
(“Drax” or the “Company”; Symbol: DRX)

Highlights

  • Robust trading and operational performance in first three months of 2020

  • Strong contracted forward power sales supporting 2020-21 earnings visibility

  • 2020 full year Adjusted EBITDA(1) currently in line with consensus(2) inclusive of £60 million estimated potential impact from Covid-19

  • Principally lower power demand and increased bad debt risk in Customers business

  • Lower ROC(3) recycle prices in Generation, partially offset by system support services

  • Strong balance sheet at 31 March 2020 – net debt: £818 million, available cash and committed cash facilities: £663 million

  • 2019 final dividend of 9.5 pence per share (£37 million) to be paid in respect of 2019 performance, as previously announced – subject to shareholder approval at AGM

  • Strategic focus remains on biomass supply chain expansion and cost reduction

Electricity pylon near Cruachan Power Station, Argyll and Bute

Electricity pylon near Cruachan Power Station, Argyll and Bute [Click to view/download]

Will Gardiner, Drax Group CEO, said:

“With our strong balance sheet, robust trading and operational performance, and resilient sustainable biomass supply chain, Drax is in a strong position to support its employees, business customers and communities during the Covid-19 crisis, while continuing to generate returns for shareholders.

Drax Group CEO Will Gardiner

Drax Group CEO Will Gardiner in the control room at Drax Power Station. Click to view/download.

“As an important part of the UK’s critical national infrastructure, we recognise our responsibility to support the country’s response to Covid-19. We have strong business continuity plans in place and are in close contact with the UK Government. Our dedicated teams across England, Scotland and Wales, supported by our US biomass colleagues and business partners, are working around the clock to generate and supply the flexible, low-carbon and renewable electricity the UK needs, not least to the 250,000 businesses, including care homes, hospitals and schools we supply.

“The Group is also providing support for communities and others affected by Covid-19.

“Nevertheless, it is still early in this pandemic. As Covid-19 continues to develop, we remain vigilant in looking to protect all our stakeholders and will report further if there are significant changes to our outlook for 2020.”

Trading, operational performance and outlook

The trading and operational performance of the Group has been robust in the first three months of 2020.

While the impact of Covid-19 is still unfolding, the Group’s expectations for 2020 Adjusted EBITDA are currently in line with consensus inclusive of an estimated potential impact from Covid-19 of £60 million, principally in relation to its Customers business.

Full year expectations for the Group remain underpinned by good operational availability for the remainder of 2020.

In the Customers business, the consequences of Covid-19 are only now starting to become visible. It is expected to result in reduced demand and a potential increase in bad debt, which represents a major sensitivity, particularly in the SME(4) market. As a result, Drax has significantly increased its expectation of potential customer business failures and higher bad debt.

Assuming the continued impact of Covid-19 throughout 2020, Drax now expects a full year Adjusted EBITDA loss for the Customers business. The Group will closely monitor the impact on the Customers business and update the market accordingly.

In Generation, the Group’s expectations for the full year reflect a reduction in ROC recycle prices resulting from reduced power demand. Drax expects to partially offset this through increased activity in system support services across its generation portfolio.

The performance of the Generation business is dependent on the continuation of biomass deliveries to Drax Power Station. Biomass generation is currently the most material area of activity for the Group and a protracted suspension of the supply chain could lead to lower levels of biomass generation, resulting in a reduction in the Group’s expectations for the full year. At present there has been no impact from Covid-19 and the Group has a good supply of biomass throughout the supply chain, which continues to be robust and functioning well.

Engineer climbs cooling tower at Drax Power Station

Engineer climbs cooling tower at Drax Power Station [Click to view/download]

Generation

During the first three months of 2020 Drax’s generation portfolio performed well with good asset availability and optimisation of generation underpinning a strong financial performance.

The business benefits from a strong forward power sales position through 2022 which, combined with index-linked renewable schemes and capacity payments, provides a high level of earnings visibility, helping to protect the business from the current weakness in UK power prices.

In response to Covid-19, Drax has implemented robust business continuity procedures across its sites to protect employees and contractors and ensure continued operation. In addition to operating strategically important infrastructure, the components of the Group’s UK supply chain are considered key sectors allowing continued operation.

The Group’s biomass supply chain has a high level of operational redundancy designed to mitigate any potential disruption. Drax sources biomass from suppliers across North America and Europe, including the Group’s own facilities in Louisiana and Mississippi. In the UK, Drax utilises dedicated port facilities at Hull, Immingham, Tyne and Liverpool, with a capacity of eleven million tonnes, providing supply chain capacity in excess of the Group’s annual biomass usage of over seven million tonnes.

Sustainable biomass wood pellets destined for Drax Power Station unloaded from the Zheng Zhi bulk carrier at ABP Immingham

Sustainable biomass wood pellets destined for Drax Power Station unloaded from the Zheng Zhi bulk carrier at ABP Immingham [Click to view/download]

Drax Power Station has 300,000 tonnes of biomass storage capacity. Taken together with volumes throughout its supply chain the Group currently has visibility of over one million tonnes of biomass in transit – enough to operate the CfD(5) unit on its own for over four months, subject to managing deliveries to Drax Power Station.

Biomass generation has performed well in the first three months of 2020. Whilst Covid-19 has not had any measurable impact on biomass generation to date, a sustained reduction in electricity demand could result in a reduction in ROC recycle prices in the current compliance period. The Group has adjusted its expectations for the full year but the precise impact will be dependent on the depth and duration of any reduction in demand. Drax expects to partially offset this through increased activity in system support services across its generation portfolio.

Engineer at Cruachan Power Station

Engineer at Cruachan Power Station [Click to view/download]

The Group’s hydro assets have performed well, particularly the pumped storage business, primarily driven by activity in the system support services market. As previously disclosed, Cruachan Pumped Storage Power Station was successful in a tender process run by the system operator to procure inertia and reactive power services. The contract is worth up to c.£5 million per year over six years and is expected to commence during the second quarter of 2020. This was the first tender of its kind and reflects the growing importance of system support services as the generation market becomes increasingly supplied by intermittent renewable power sources. The system operator is expected to conduct further tenders over the coming year.

Thermal generation is performing in line with Drax’s expectations.

Pellet Production

LaSalle BioEnergy wood pellet manufacturing plant in Louisiana

LaSalle BioEnergy wood pellet manufacturing plant in Louisiana [Click to view/download]

Pellet Production has performed well in the first three months of 2020.

At present there has been no disruption to production caused by Covid-19, although the State of Louisiana is experiencing a high number of cases. The semi-automated nature of the pellet production process limits the need for individuals to be in contact with each other and this has been enhanced by robust business continuity procedures to further reduce the risk to employees and contractors.

Drax continues to monitor developments closely and notes that energy, rail, port and forestry are designated key sectors in the USA allowing continued operation.

Customers

The Group’s Customers business, which sells power, gas and energy services to the I&C(6) and SME markets has seen a significant reduction in demand as a result of Covid-19. The Group has been working to assess the potential impact of this demand reduction, the increased risk of business failure and bad debt. The impact is expected to be most pronounced in the SME market, which represents c.30 percent of monthly billing. The impact is expected to be partially mitigated by credit insurance in respect of certain customers.

Balance sheet

At 31 December 2019 Drax had £404 million of cash, which increased to £454 million at 31 March 2020.

The Group’s plan for 2020 included capital investment of £230-£250 million, with half of this assigned to strategic investment in biomass expansion and cost reduction. Whilst the Group continues to see its biomass strategy as both a primary long and short-term source of value, Drax is reviewing the timing of its investment programme in 2020 and in the short-term investment is expected to be lower.

At 31 March 2020 net debt had reduced to £818m million and Drax continues to target around 2 x net debt to EBITDA for the full year.

The Group has available cash and committed facilities of £663 million including a cash line available within a £315 million Revolving Credit Facility (RCF), which is currently undrawn and matures in April 2021. The Group has an ESG facility with final maturity in 2022 and a £350m sterling bond which matures in 2022. The Group has a further $500 million fixed rate USD bond maturing in 2025 and infrastructure private placement loans maturing through 2024-2029.

The Group’s facilities include a maintenance covenant which, if triggered, requires a minimum EBITDA level requirement around 40% of 2020 current consensus Adjusted EBITDA. Customary covenants apply to all other facilities.

The Group’s rolling five-year foreign exchange hedge book continues to provide protection from the recent weakness in sterling to 2025. The Group actively manages risk limits with counterparties providing forward foreign exchange contracts and the current weakness in sterling has led to the rebasing of a number of contracts, resulting in the acceleration of cash flows from these contracts to the benefit of Drax.

Contracted power sales

As at 16 April 2020, the power sales contracted for 2020, 2021 and 2022 were as follows:

202020212022
Power sales (TWh) comprising:16.79.64.3
– Fixed price power sales (TWh) 17.110.14.3
Of which CfD unit (TWh)3.8
At an average achieved price (£ per MWh)53.249.448
– Gas hedges (TWh)-0.4-0.5-
At an achieved price (pence per therm)1.732-

Merchant power prices remain an important part of the Group’s earnings, but by focusing on flexible, renewable and low-carbon generation, which includes index-linked renewable schemes, capacity payments and system support services, the impact of power prices has reduced.

Exposure to merchant power prices by generation asset class

  • Biomass CfD – power produced by this unit is remunerated based on an index-linked strike price and underpinned by a private law contract which runs until March 2027. At baseload the unit is expected to produce over 5TWh per year. The current strike price is c.£116/MWh and taken together with a biomass cost at or below c.£75/MWh gives a margin of over £40/MWh and an annual contribution to gross profit of over £200 million, with daily cash settlement in 30 days
  • Biomass ROC – ROC buyout prices are index-linked and extend to March 2027, acting as a premium on UK power prices. The buyout price for the current compliance period is £50.05 per ROC. Annual generation is in the region of 9-10 TWh, with the associated power sold up to two years forward, providing strong earnings visibility over the period 2020-21
  • Hydro – a small but profitable volume of merchant power generation (144MW) with zero fuel cost
  • Pumped storage – operates in the system support services market and carries little net exposure to merchant power prices
  • Coal – commercial generation will end in March 2021, ahead of which date Drax will utilise its residual coal stock to realise further cash flows
  • Gas – the Group’s mid-merit CCGT(7) assets have power forward sales for 2020. To the extent that gas prices continue to set the price of power, the clean spark spread from these assets is expected to be maintained at or around current levels in future periods
Engineer working in PPE at Rye House Power Station in Hertfordshire

Engineer working in PPE at Rye House Power Station in Hertfordshire [Click to view/download]

Investment in biomass to increase capacity and reduce cost

Biomass sustainability remains at the heart of the Group’s activities and building a long-term future for sustainable biomass remains the Group’s strategic objective. Drax remains focused on reducing biomass costs to a level which makes biomass generation in the UK economically viable when the existing renewable schemes end in 2027.

Innovation engineer looks up at flue gas desulphurisation unit. The massive pipe above him could be used to transport more than 90% of the carbon captured in the BECCS power generation process.

An engineer looks up at flue gas desulphurisation unit (FGD) at Drax Power Station. The massive pipe would transport flue gas from the Drax boilers to the carbon capture and storage (CCS) plant for CO2 removal of between 90-95%. [Click to view/download]

The Group is targeting five million tonnes of self-supply capacity by 2027 (1.5 million today, plus 0.35 million tonnes in development), with greater scope for operational leverage and cost reduction. These savings will be delivered through further optimisation of existing biomass operations, greater utilisation of low-cost wood residues and an expansion of the fuel envelope to incorporate other low-cost renewable fuels across its expanded self-supply chain. Drax remains alert to sector opportunities for organic and inorganic growth.

By 2027 these activities would enable Drax to develop a biomass generation business operating without the current renewable schemes and potentially the development of BECCS(8), subject to the right support from the UK Government. Drax notes the incremental progress and support announced for carbon capture and storage at the UK Government’s Budget in March 2020.

These efforts support the Group’s ambition to become a carbon negative company by 2030.

In addition, the Group is exploring options to service biomass demand in other markets – Europe, North America and Asia.

Capital allocation and dividend

The Group remains committed to its capital allocation policy established in 2017, through which it aims to maintain a strong balance sheet; invest in the core business; pay a sustainable and growing dividend and return surplus capital beyond investment requirements.

A final dividend of 9.5 pence per share in respect of 2019 performance was proposed at the 2019 Full Year Results on 27 February 2020 and, subject to shareholder approval at today’s Annual General Meeting, will be paid on 15 May 2020.

An interim dividend of 6.4 pence per share was paid in October 2019, making the total dividend in relation to 2019 performance 15.9 pence per share.

In determining the continued appropriateness of the dividend, the Board has considered a range of factors – trading performance, current liquidity, the outlook for the year in the context of Covid-19, as well as the steps being taken to support all stakeholders. The Board believes payment of the final dividend remains consistent with the Group’s commitment to stakeholders.

Drax will update on its expectations for the 2020 full year dividend at the 2020 interim results on 29 July 2020.

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 1757 612 491

Media:

Drax External Communications: Ali Lewis

+44 (0) 7712 670 888

Website: www.drax.com

END

Annual General Meeting arrangements in response to COVID19

15 April 2020

Investors
Sunset Cityscape of Northampton
RNS Number : 6996J
Drax Group PLC
(“Drax” or the “Company”; Symbol:DRX)
On Wednesday 18 March 2020, Drax posted the notice (‘Notice’) of its annual general meeting (‘AGM’) to be held at 11:30am on Wednesday 22 April 2020 at Grocer’s Hall, Princes Street, London, EC2R 8AD (‘Grocer’s Hall’).

On Monday 23 March 2020, the UK Government announced mandatory measures concerning social distancing to reduce the transmission risks of Covid19. These measures require people to stay at home other than for limited purposes and stop all gatherings of more than two people in public. As a result, it is now prohibited for the Company to hold its AGM in the normal way.

Revised Arrangements

The Company has been advised by Grocer’s Hall that the venue is presently closed. Given the prevailing restrictions, the Company has decided to make alternative arrangements in order to ensure the AGM can lawfully be held to consider the business as set out in the Notice.

Arrangements have been made by the Company to hold the AGM at an alternative venue and to ensure that the required quorum will attend the meeting, whilst also complying with the UK Government’s mandatory measures.  The new venue for the AGM will be 8-10, The Lakes, Northampton, NN4 7YD.

Voting Details

Shareholders are encouraged to submit their votes in respect of the business to be conducted at the AGM.

As physical attendance at the AGM is prohibited, holders of ordinary shares who wish to register their votes on the resolutions to be put to the AGM should do so by completing and signing the proxy form that accompanied the 2020 AGM Notice (or appoint a proxy electronically if their shares are held in CREST) in accordance with the instructions printed on the proxy form. Please ensure that your proxy form appoints the chair of the meeting as proxy, since no other proxies will be allowed to attend the meeting in person.

As an alternative to completing the hard-copy Proxy Form, you can appoint a proxy electronically by visiting www.sharevote.co.uk. You will need your Voting ID, Task ID and Shareholder Reference Number (this is the series of numbers printed on your Proxy Form). Alternatively, if you have already registered with Company’s registrar’s online portfolio service, Shareview, you can submit your Proxy Form at www.shareview.co.uk using your usual user ID and password. Full instructions are given on both websites. As mentioned above, please ensure that your proxy form appoints the chair of the meeting as proxy, since no other proxies will be allowed to attend the meeting in person.

Please return your forms as soon as possible and in any event prior to 11:30am on Monday 20 April 2020, (being not less than 48 hours before the time of the meeting).

For Share Incentive Plan (SIP) participants, a Form of Direction should be sent to the Trustee, Equiniti Share Plan Trustees Limited, at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA to arrive by no later than 11:30am on Friday 17 April 2020.

If you do not have a proxy form or a Form of Direction and believe that you should have one, or if you require additional forms or have any additional queries on voting, please contact our registrar using the details set out below:

Equiniti Limited, (‘Equiniti’) Proxy Department, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA.

Enquiries can also be made to Equiniti using their telephone helpline service on 0371 384 2030 from within the UK or +44 121 415 7047 from outside the UK. Lines are open from 8:30am to 5:30pm, Monday to Friday – excluding public holidays in England and Wales.

The Board believes the actions being taken in these exceptional circumstances are necessary in order to comply with the measures introduced to safeguard the wellbeing and health of everyone, including our shareholders, employees and members of the wider community, which has to be our first priority.

Shareholder Engagement

As outlined in our annual report we continually undertake engagement with Company stakeholders through various means. We are sorry that we cannot meet at the AGM, which routinely is one such important aspect of enabling discussions with shareholders. If shareholders have any questions about Drax Group plc, please contact us using the details which we maintain on our website via the link https://www.drax.com/investors/investor-contacts/.

The details contained within this announcement have been mailed to shareholders and a copy is also available on the AGM and General Meeting section of our website https://www.drax.com/investors/results-reports-agm/

Ends

Enquiries:

Group Company Secretary: Brett Gladden
[email protected]
+44 (0)7936 362586

Responsibility, wellbeing and trust during the COVID-19 outbreak

Will Gardiner, Chief Executive Officer, Drax Group

25 March 2020

Opinion
Engineers in PPE working at Drax Power Station

We are living through unprecedented times. Coronavirus is having far reaching effects on all industries not just here in the UK, but around the world. At Drax, we take our responsibilities as a member of critical national infrastructure and as an essential service provider very seriously. We are committed to maintaining a continuous, stable and reliable electricity supply for millions of homes and businesses in the UK.

The wellbeing of our people

Firstly, I’d like to thank our employees, contractors, supply chain workers and their families as well as the communities in the UK and US in which we operate, for their fantastic support and continued hard work during these difficult and uncertain times. Our employees’ health and wellbeing are vital, and we’re working hard to ensure we are supporting them with both their physical and mental health, whether working at home or at one of our sites.

Engineer maintaining equipment in Drax Power Station

Engineer maintaining equipment in Drax Power Station [Click to view/download]

Across all our sites we are have implemented strategies to reduce the chances of people spreading the virus and have operational plans in place to ensure continued delivery of power into the grid.

Power station resilience

At Drax Power Station, the UK’s largest power station, largest decarbonisation project in Europe and biggest source of renewable power into the national grid, we have arranged for the separation of key operational teams and employees so that they are physically distanced from each other. We have moved as many employees as possible to work from home, so that there are fewer people in our workplaces reducing the risk of the spread of infection, should it arise. We have strict controls on visitors to the site and on our contractors and suppliers. Our resilience teams are working well and we have contingency plans in place to manage risks associated with colleague absences.

We have closed the visitor centres at Cruachan pumped storage hydro power station and Tongland hydro power station in Scotland, as well as at Drax Power Station in North Yorkshire. We have also stopped all but critically important travel between our sites.

Our supply chain

Sustainable biomass wood pellets destined for Drax Power Station unloaded from the Zheng Zhi bulk carrier at ABP Immingham [Click to view/download]

It is vital we maintain a resilient supply chain for the sustainably sourced biomass wood pellets required to produce electricity at Drax Power Station, the country’s largest power station. We’re working closely with our suppliers in the US and Europe to maintain biomass supplies as well as with rail and port infrastructure in the US and UK to ensure continuity of supply.

Just last week Associated British Ports (ABP) and Drax received and unloaded the largest ever shipment of sustainable biomass to arrive at the Port of Immingham in the UK’s Humber region. The vessel transported 63,907 tonnes of Drax’s wood pellets from the US Port of Greater Baton Rouge in Louisiana. The consignment supplies Drax Power Station with enough renewable fuel to generate electricity for 1.3 million homes.

Our three wood pellet manufacturing plants are running well, with US authorities classifying our employees as key workers. The same is the case for our rail freight partners on both sides of the Atlantic. In the UK, GB Railfreight recognises the strategic importance of biomass deliveries to Drax Power Station.

Our customers

Businesses – both large and small – are feeling the economic effects of this virus. Our employees involved with the supply of electricity, gas and energy services to organisations are working hard to support them. More information can be found via these links:

We are working closely with BEIS, HM Treasury and our trade associations to explore how government and industry can further support business through this challenging time. Organisations facing financial difficultly can access the unprecedented level of support already announced by the Chancellor, Rishi Sunak via:

Drax employee in high visibility clothing on the telephone

Drax employee in high visibility clothing on the telephone [Click to view/download]

Leadership

Our Executive Committee is meeting regularly via video conference to discuss our contingency planning as the situation changes. We are working closely with the UK, US state and Canadian governments, National Grid and Ofgem to ensure that we remain up to date with the latest advice and that we are prepared for any further escalation.

This is an unprecedented time for the UK and the world. Rest assured that Drax’s critical national infrastructure and essential service operations, as well as its employees, are working hard 24/7 to make sure individuals, families, businesses and organisations are supplied with the vital electricity needed to keep the country running.

Mailing of the Annual Report and Accounts 2019, Annual General Meeting and key dates relating to the proposed final dividend

Investors
Red British post box set against a hedgerow

RNS: 7279G
Drax Group plc
(“Drax” or the “Company”; Symbol:DRX)

Mailing of the Annual Report and Accounts 2019 and ancillary documents to shareholders

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

  • Annual Report and Accounts 2019;
  • Notice of the 2020 Annual General Meeting; and
  • Form of Proxy for the 2020 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 2019 and the Notice of the 2020 Annual General Meeting will also shortly be available as follows:

  • for viewing on the Company’s website, www.drax.com; 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 22 April 2020, at Grocers’ Hall, Princes Street, London EC2R 8AD.

We are monitoring the potential impact of COVID-19 on the arrangements for the AGM. We expect to hold our AGM at the venue stated above and are encouraging all shareholders to vote in advance of the meetings using the proxy facilities set out in the Notice of Meeting. We will update shareholders in the event that alternative arrangements prove to be necessary.

Key dates relating to the proposed final dividend

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

  • 23 April 2020 – ordinary shares marked ex-dividend.
  • 24 April 2020 – record date for entitlement to the dividend.
  • 15 May 2020 – payment date for the dividend.

The proposed rate of the final dividend is 9.5 pence per share.

Brett Gladden
Company Secretary