UK’s Drax Finalizes Deal For Government Biomass Subsidies
Pellets used to produce biomass fuel are delivered to the Drax power station near Selby, UK.
Photographer: Simon Dawson/Bloomberg
Drax Group Plc has signed a low-carbon contract for difference with the UK government covering its four biomass units, finalizing an agreement that analysts had expected to be delayed until next year.
The deal, which runs from April 2027 to March 2031, carries a strike price of £109.90 per megawatt-hour in 2012 prices, according to a statement from Drax. This is slightly below the £113 level outlined in an initial heads of terms in February, reflecting lower biomass costs due favorable movements in exchange rates.