5th Nov 2014 08:11
LONDON (Alliance News) - Drax Group PLC Wednesday said its expectations for the full year remain unchanged despite challenging conditions as it continues to progress with its transition to becoming a biomass-fuelled electricity generator whilst evaluating further investment opportunities.
As at October 27, power sales in 2014 have totalled 25.9 terra-watt hours. For 2015, it said power sales are expected to total just 15.6 terra-watt hours.
Of the power sales contracted, fixed price sales contracted for 2014 contribute 25.2 terra-watt hours, at an average price of GBP51.7 per mega-watt hour, including a 1.9 terra-watt hour contract with Centrica between January 1 and October 27.
For the 2015, fixed price sales will contribute 13.2 terra-watt hours, at an average price of GBP52.7 per mega-watt hour.
The balance is made up of fixed margin and structured power sales. In 2014, these contracts contribute 0.7 terra-watt hours, and in 2015 they will contribute 2.4 terra-watt hours. The fixed margin and structured power sales are also with Centrica in both 2014 and 2015, it said.
"We have extended our contracted position, including additional power sales of more than 3 terra-watt hours for 2015 compared to the position reported in July," said Drax.
The company says its expectations for the full year remained unchanged, and its capital investment remains on schedule and on budget.
"Trading conditions in the markets in which we operate have remained challenging. However, we continue to benefit from a strong contracted position. In addition, we have delivered good operational performance in the year to date from both our coal and biomass generating units," said Drax.
The company has continued progressing with its ongoing transformation to a predominantly biomass-fuelled electricity generator. In 2013, it converted its first unit to biomass and the company's second unit was fully converted to biomass in October, it said in a statement.
A third unit is due to be converted to biomass between July 2015 and June 2016, subject to receiving clearance from the European Commission, it said.
Drax is also expecting its first pellet plant and port facility in the US Gulf of Mexico to begin commercial operations in the first quarter of 2015, with the second pellet plant to follow in the second quarter.
The company continues to evaluate further biomass related capital investment opportunities, including converting a fourth unit to biomass, adding a third pellet plant in the US Gulf and the development of pellet operations on the east coast of the US, it said in a statement.
By Joshua Warner; [email protected]; @JoshAlliance
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