**Summary**
Drax Group PLC has signed a **Low-Carbon Dispatchable Contract for Difference (CfD)** agreement with the UK Government (via the Low Carbon Contracts Company - LCCC) for the operation of Drax Power Station (DPS) from **April 2027 to March 2031**. The contract covers all four biomass units at DPS, with a **strike price of £109.90/MWh (2012, real)**, and includes a **generation collar of approximately 6TWh per annum**, allowing flexible operation to support both high and low demand periods. The agreement also permits unrestricted merchant generation above the collar.
Key highlights include
**Strike price reduction** from the February 2025 Heads of Terms, reflecting favorable exchange rate movements and reduced biomass costs, with no material impact on Adjusted EBITDA expectations.
**Enhanced biomass sustainability requirements**, ensuring all biomass is sustainably sourced and verified through rigorous monitoring and auditing.
**Estimated savings of up to £3.1 billion** over the four-year term, as per independent analysis by Baringa, while ensuring energy security for millions of UK homes and businesses.
Drax CEO Will Gardiner emphasized the agreement’s role in supporting UK energy security, enabling the rollout of intermittent renewable generation, and delivering long-term economic benefits for the region. The contract aligns with Drax’s commitment to climate, nature, and people-positive outcomes.
The announcement contains forward-looking statements, noting risks such as economic uncertainty, regulatory changes, and operational challenges. Drax does not intend to update these projections unless required.
**Contact details** for investor relations and media inquiries are provided, along with a disclaimer regarding the use of inside information and forward-looking statements.