Drax secures capacity deals, faces fresh sourcing scrutiny

28th Feb 2024 07:23

(Sharecast News) - Drax Group announced provisional agreements secured through the recent T-4 capacity market auctions on Wednesday, as it also faced fresh scrutiny over its sourcing practices.

The company said it had secured agreements totalling 462MW of capacity from existing pumped storage and hydro assets, along with 240MW for the refurbishment of Cruachan Power Station units three and four.

It said the agreements would span from October 2027 to September 2042 and were priced at £65 per kilowatt.

The combined income from the agreements was estimated to be around £249m during their respective delivery periods.

Drax's announcement of the agreements came amid fresh revelations by the BBC, raising concerns about the company's sourcing of wood pellets from environmentally sensitive areas, including rare forests in Canada.

While Drax maintained that its wood pellets were sustainably and legally harvested, allegations regarding the use of timber from primary and old-growth forests prompted intensified scrutiny of its supply chain practices.

Reporting by Josh White for Sharecast.com.