Good news this morning regarding the new carbon capture and storage/re-use project announced by Drax.
Hope this goes further than previous projects. Rather than pump the gas down in to old oil wells, the hope here is that the captured co2 will be stored under pressure for future use in industrial processes.
The company is hostage to, and dependent on, government energy policy and subsidies - and been badly burned before.
Its more of a gamble than an investment as who knows which way they will turn next, unless Drax come up with something that consumes the wrong sort of immigrants.
The whole of the renewable energy 'industry' ( solar,wind,tide ) is, to a large extent,
subsidized by 'us'.
Throw in corruption and self-interest and it is a complete farce.
Even the great hope of 'cheap' energy from nuclear is now revealed as a lie , worse,
our involvement in new designs died when the CEGB was sold off.
All 'we' can do, is try and guess who will make money and invest .
"MIDAS SHARE TIPS: Energy firm Drax might energise your share portfolio
By Joanne Hart, Financial Mail on Sunday
Published: 21:51, 19 May 2018 | Updated: 21:51, 19 May 2018
Renewable energy now accounts for more than a quarter of all the power produced in the UK. The statistic is impressive but Government targets are much more stretching, with a goal to reach 30 per cent by 2020 and considerably more over the next decade.
Drax is well positioned to help drive this change. The shares are 350¼p and should increase in price as the company expands its renewable energy business and develops other, related, divisions. There is a commitment to rewarding shareholders too, through dividends, share buy-backs and one-off payments so the stock has an attractive yield for income-seeking investors.
Analysts expect underlying earnings to increase by 9 per cent this year to £250 million, rising to £300 million in 2019. The dividend is forecast to grow from 12.3p in 2017 to 14.2p in the current year and 15.6p in 2019.
Midas verdict: Drax is contributing to the UKs renewable energy future and delivering for shareholders at the same time. A good, long-term buy, with generous dividends too."
I'd be quite wary of investing in Drax for anything but the short term. In effect, the company no longer operates in a free market as it's biomass generation is very heavily subsidised. There is a lot of disagreement on how green Drax's biomass generation actually is; I recall that the CO2 emissions from felling, processing and shipping the pellets from North America alone account for approaching 50% of the emissions from using coal to generate a similar amount of energy. Then the biomass itself emits roughly the same CO2 as coal per unit of energy generated. When this scam is finally recognised the subsidies will be vulnerable. And I thought the new CEO's performance on Dispatches recently was pretty lamentable - like a man pretending to speak the truth but knowing he was not.
Couldn't have happened to a nastier person. I look forward to Amber's explanation regarding what she "understood" regarding Drax. Somehow she claims that she didn't read any briefing or memo regarding immigration whilst Home Secretary so why bother knowing anything about the company that supplies circa 8% of power for Britain whilst Energy Secretary? The mind boggles as to what she spoke to EDF and the Chinese about. Perhaps she thinks that they will be building/financing a plant powered by nuts. Now she can return to representing her banned father, tony Rudd, on boards of directors
It seems that merrill Lynch has "raised "DRX to BUY with a target of 425pence per share.
If you google "Merrill Lynch raises DRAX to BUY" you will find an FT article and the comments are the last but one paragraph. I would have just copy and pasted it but when I tried before the actual paragraph I got a piece saying that I would be in breach of copyright, so I thought better of it!
Let's hope they are right and some of us poor shareholders might get our heads back above water.....
● BoA Merrill Lynch upgraded Drax to buy with a 425p target price, largely on the prospect of cheaper biomass feedstock supporting earnings. The majority of Draxs profit is now underpinned by long-term government subsidies, meaning the power station owner can invest for growth or return cash to shareholders, Merrill said.
We think Drax is 40 per cent cheap in our central scenario, which is conservative. The shares could double in a blue-sky outcome. Risk is asymmetric and heavily skewed to the upside, with strong cash generation driving a free cash flow yield of 15 per cent from 2019. Lower biomass fuel costs could be a key value driver and enable a [power] plant life extension beyond 2027.
Even as I type, coal producing 29% of demand.
There is a restraining hand somewhere in the system with some common sense left.
Unknown but influential enough to realise the folly of destroying those coal burners we
haven't torched , yet.
Well done you.
Fossil fuel or Biomass, Drax still has a very large input to the Grid, and with the adverse weather we have had recently , I am sure that they are operating at full steam . Stick with them , I have just bought back in, as at the recent t low £2,s were a good opportunity, as I think they were oversold, and glad to see I have been lucky with my timing at this stage .
Well done HR, I'm back where I started nearly three years ago.
Tried to sell at 291 a few weeks ago only to find the new iii platform wasn't working !
You will find there will be a 'saw-tooth ' point where the big traders sell/buy to make a living.
Very happy with the 3% bump in the price this morning. It won't last the day, I'm sure.
The results were surprisingly good, considering the cost of buying Opus energy and the negative impact of currency hedging following the strengthening of sterling against the US dollar.
Also pleased with the now 5% dividend and the promise of further divi growth, year on year.
The three converted units are now in full production and Drax produced 15% of all renewable power for the UK last year. The fourth unit conversion to full biomass should complete this year and will add to that total.
The other priority for this year is getting LaSalle into full production, which again will increase the volume of "in house" biomass production and ongoing supply line savings and flexibility.
Opus energy is also contributing positively to the results, and overall Drax is creating a good flow of cash.
I may well be increasing my holding throughout the year. I love this business!
As a too long holder of this dog share I truly hope your plan pays off.
I could easily go on a rant about what politicians and their ilk have done to the successful energy industries this country once had.
Picking up from the last discussion point. Howevercost rather than value.
It is £8.40 /kW /year in 2021/22. For 500MW unit, around £4.2m.
Tomorrow we will see what capacity DRAX offered and won, or not.
I could imagine this £8.40 is below expectation. However if you are budgeting to run the plant to get ROCs, then it is better than the alternative - nothing.
Costs of these capacity payments will be coming to your electricity bill, to add to, well many other supplements.
Probably relevant to DRAX if anyone has time to read.
The government is considering the appropriate legislative vehicle for introducing the
emissions intensity limit from 1 October 2025 and other measures required to implement it. As the introduction of the emissions intensity limit will
prevent unabated coal units entering into the Capacity Market auctions held in late 2021/early 2022 for the 2025/26 delivery year, and subsequent auctions for delivery years beyond that, the government will prepare the required legislation in good time before these 2021/22 auctions. A final Impact Assessment will be published
at that time
Should be no surprises for DRAX management.
A, off to buy another propane tank for next week, brrrr
I hope to buy back into these in the future, but it is au revior for now. Sold out a week or so ago and saw the price climb, but is now back to its 2009 level.
I'm afraid it is the fear of Corbyn and the continued bashing by the liberal leftie loons who can't grasp sustainable forestry or the carbon cycle.
Great little company, and I hope it does well, but the first rule of investing is still true; don't lose money!
What is particularly noteworthy is that AMPH have interests in Grid balancing and Battery storage.
The deal gives Drax just over 4% of the shares in this company, with almost half in total out of public hands.
One to keep an eye on me thinks...
Drax has agreed the sale of Billington Bioenergy (BBE) - a distributor of wood pellets in the UK heating market - to Aggregated Micro Power Holdings, an AIM listed energy company specialising in the sale of wood fuels and the development of distributed energy assets, including biomass boilers and battery storage. Drax said the consideration for the transaction was £2m, comprised of £1.6m of shares in AMPH and £0.4m of cash. Drax said the sale was aligned with its retail strategy, focused on the I&C and SME energy markets.
However, through its shareholding in AMPH, Drax would retain an interest in the UK heating market, while gaining exposure to the development of small-scale distributed energy assets.
Chief executive Dorothy Thompson said: 'We are pleased with the sale of BBE and our investment in AMPH.
'With their leadership in the UK wood pellet heating market, we believe they are the right partner to take forward and grow BBE, whilst supporting the UK's transition to a low carbon economy." 'We look forward to working with AMPH.'
Clip and paste from Power Engineering International:
"UK power giant Drax has submitted planning permission for what would be the worlds largest battery storage facility, and an equally ambitious gas-fired power plant facility, as it continues its retreat from coal-fired power.
The company wants has already converted three of its six coal-fired units in North Yorkshire to biomass, in its attempts to adapt to the UKs phase out of coal by 2025.
It said on Wednesday that it was considering building up to 200 MW of battery storage at the site, double the size of the current largest, the under-construction 100 MW Tesla facility in Australia.
In addition, the company wants to convert two of its remaining three coal units to gas. It would create up to 3.6 GW of gas power capacity, making it comfortably the largest gas plant in Britain, ahead of the 2.2 GW gas plant in Pembrokeshire.
Drax is now seeking a development consent order from the UKs Planning Inspectorate, a process it believes could take up to two years. A decision to go ahead with the project would then rely on the company winning a 15-year subsidy contract with the government. If it did decide to proceed, it envisages both facilities could be up and running by 2023. "
Three things stand out ...
1. It takes two years to get a development consent order, when the site is already a power station and Drax wants to make it cleaner!
2. "Converting" two of the (750Mw) units will (not!) produce 3.6Gw of power
3. Very happy indeed that they are trial running the fourth unit on biofuel.
4. Well, four things then ... Drax haven't put out any news item on their web site or made a stock exchange announcement, but probably don't need to. It would be nice to know!!!
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