The current high power price environment is a clear positive for Drax, as evidenced by the contracting of an incremental 1.8TWh over the past two months at an average price of c.£170/MWh, on our estimates. Higher power price assumptions push our FY22-24E EPS estimates up, but mark-to-market risk remains to the upside, with potential incremental monthly revenue of £50-60m across FY23-24 vs. our estimates should current power prices persist. The GB electricity system has an increasing need for flexibility, and on the supply side, of both long and short duration. We visited Drax’s Cruachan pumped storage plant last week, the jewel in Drax’s hydro portfolio – a portfolio which we see delivering EBITDA of £70m on average across the next five years. Cruachan 2 is under development, and we include 12p/share in our sum-of-parts valuation as we expect Drax to develop the project, subject to securing planning and a supportive remuneration framework. Coal may yet take one last breath given GB energy security concerns and, although Drax will need to invest in its OCGT projects, we still expect these to be sold – recovering as a minimum the investment to date. A global drive for decarbonisation and energy independence points to long-term demand growth for biomass, supported by policy development. Adjusting for the impact of our pellet production business estimates factoring in a below market transfer price to Drax post 2027, our valuation of this activity is at a discount to peer Enviva, suggesting we may be erring on the side of caution. Higher earnings estimates, notably in FY23E and FY24E, are the key driver of a target price that rises to 1,050p from 790p. BUY.