in4apennyin4amil1
23 Dec 2016
Re: Good news today Ah, I see what type saying. I wouldn't care if we had to pay back money to DECC, BSIS or whatever they're called these days because of the market ever gets up to £100/MWh, Drax's share price would probably be £10+. But I agree with your sentiment. It's perverse that the government has introduced CfD Fit to support renewables, but are having to pay diesel generators to be on stand by under the capacity mechanism. The simple solution is to offer more support to convert another unit to Biomass.
Punilux
23 Dec 2016
Re: Good news today In4apenny...The point that I was trying to make is that Drax is one of the very few facilities that can generate extra capacity at the drop of a hat. The only other alternative that the government has are extremely expensive, and toxic, diesel powered generators which it is paying people to have on standby. It is not paying Drax for the potential extra capacity during a surge in usage, so why should Drax effectively pay back any additional income to HMRC ?
MNKGV
23 Dec 2016
Re: Good news today I agree, that is how it is meant to work but as I recall, Drax had a valid, signed and sealed document, from 'the Government' to go ahead with the cutting torches and destroy the last few coal fired boilers. Then ' the Government' changed their mind and had to get their judges in a headlock to get out of jail free. How can you ever trust anything after that?
in4apennyin4amil1
23 Dec 2016
Re: Good news today Punilux... I think you misunderstand the way it works. The strike price is marked against the average day ahead prices over the course of a season. The CfD was introduced to provide incentives for renewable generators to build new (or convert existing) stations as it was considered as the most efficient way to meet the government's ambitious emissions reduction targets. When the CfD was launched the market was £20/MWh higher than it is now and there were concerns about security of supply, so those strike prices were believed to be good value. If the market price is less than that the strike price, Drax is paid money up to the strike price as a top up, if the wholesale price ever gets above that, then Drax pays some back. It gives generators the certainty and a price signal to invest - and even if the market price was above the strike price, Drax would be rolling in money.But as it happens, it's very unlikely we'd get prices up at those kind of levels for any prolonged period. It's a win-win.The only disappointing thing is that the government moved the goalposts after the initial bidding stage because the other unit they wanted to join the CfD scheme was ranked above all other projects I.e. The two units were ranked joint top as the most efficient means to meet government targets, but they didn't want to pay Drax too much money. It remains the most cost effective means to cut carbon not currently proceeding. Drax just need to convince the government that it is worth f doing because it provides this country not just with renewable generation, but flexible, dispatchable (I.e. Reliable) generation.
Punilux
22 Dec 2016
Re: Good news today Get well soon HR!I look forward to your research. The scenario that you suggest would imply that Drax shareholders will be funding any "emergency" capacity requirement to the UK power network. If 10p is exceeded, and Drax is the only facility able to generate more power needed to meet demand then why should any extra income be returned? It's not like the present government won't pull the rug from under us (again) when they change their mind. Is any future gas powered generation included?
Happy Rabbit
21 Dec 2016
Re: Good news today Punilux, the cfd is replacing earning ROC's for Drax and other renewable generators.At £100/mwh (10p per unit) it is the support price that Drax will get if the wholesale market is below that figure, then the difference will be made up to 10p. I'm not entirely sure how this contract will work, but I expect Drax will sell its power on the wholesale market, and anything sold above this price will go back to the tax payer.I'll look into it in more detail in a few weeks time. I'm recovering from a major heart op atm, so am lacking energy and concentration!Regards,Happy (could do with a power boost)
Punilux
21 Dec 2016
Wake Up To Morning The BBC radio flagship financial programme has excelled itself this morning! Dorothy Thompson is no longer CEO, she has been replaced by "Andy", Drax are intending to spend hundreds of millions converting to 50% coal / 50% biomass and are having this funded by the EU. How Radio 5 manage to squeeze such great investigative journalism into its wall to wall housewives gossip is beyond me.
Punilux
19 Dec 2016
Re: Good news today - 790 ? This share has been 790 for most of this evening according to Interactive Investor. Don't they have some moral responsibility to have SPs which reflect the real "cost" of trading shares?
Punilux
19 Dec 2016
Re: Good news today I realise that the normal government expert in these matters has presently been seconded to assist in transferring prisons to the public sector (residential criminal section), but don't CfDs send a shudder down Drax shareholders' spines?
in4apennyin4amil1
19 Dec 2016
Re: Good news today I should add, that I was talking about the medium term. 6 months+
TradedOption
19 Dec 2016
Re: Good news today nk1999,It'd be good to see this head back up a bit. I knew leaving the lights on at home 24/7 and refusing to install LED lamps would pay off in the end.Cheers
Happy Rabbit
19 Dec 2016
Re: Good news today nk, yippee and about time too! Three down, three to go. Gosh, we really need Drax running on biomass to keep the lights on.It is both encouraging and alarming that Ofgen finally seem to be waking up to the fact that we are going to be a little bit short of power next year, but better late than never.Regards,
in4apennyin4amil1
19 Dec 2016
Re: Good news today Yep. Good news.I wasn't expecting this until the new year.I think SocGen are being cautious. IMHO I expect it to head towards a fiver.
nk1999
19 Dec 2016
Good news today EC approved CfD contract:RX/news/item/2213908/european-commission-approves-cfd-contract?context=LSE
RXAlso:Societe" target="blank" rel="nofollow">[link] Generale today upgrades its investment rating on Drax Group PLC (LONRX) to buy (from hold) and raised its price target to 415p (from 270p).Looking forward to a push towards 400p.nk
in4apennyin4amil1
06 Dec 2016
Positive news Market has reacted well to the news.This is a positive move, providing diversity for a business that was a bit one dimensional before.It's a Buy from me.
