Hedging improvement… The hedged position for 2022 is now 10.7TWh ROC output @ £90.2/MWh (vs. 11.7TWh @ £87.2/MWh), and 0.3TWh hydro output @ £255.6/MWh (vs. 0.3TWh @ £133.1/MWh). For 2023, the hedged position is now 11.1TWh ROC output @ £154.5/MWh (vs. 8.8TWh @ £98.3/MWh), and de-minimis hydro output (vs. 0.1TWh @ £242.0/MWh). The hedged position for 2024 is now 6.1TWh ROC output @ £159/MWh (vs. 4.5TWh @ £109.5/MWh). For 2023, our pre-existing estimates suggest an average price of £125.9/MWh, while for 2024 our average price is £148.6/MWh, albeit that there is material open volume in 2024. …biomass costs increasing, but FY22 guided up However, Drax is pointing to biomass costs in excess of £100/MWh for 2023, above the c.£94/MWh we have in our model, while the interaction with the Electricity Generator Levy needs to be considered. For 2022, there is an upgrade to guidance, with Drax expecting that full-year adjusted EBITDA will be slightly above the top end of the current analyst range of £651-681m. Our pre-existing estimates are at £675m. FID taken on 0.6mt of pellet capacity Drax has taken a FID to invest in two new pellet production projects - a 450kt new-build pellet plant at Longview (Washington State), including the development of a new port facility at this location, and a 130kt expansion of its Aliceville site (Alabama). The combined investment is expected to be in the region of $300m, inclusive of the effect of inflation on construction cost. The historic ‘rule of thumb’ was an investment cost of c.£200/t, and clearly this is above that level. However, the investment includes port infrastructure, and co-location of the pellet plant and port will remove transportation costs.