Growth plans Post the capacity payments resolution, we look for insights on investment options into new generation capacity. Drax has around £2bn worth of projects that are permitted and ready for development. We think it is unlikely that it will undertake investment plans that would require equity or put the dividend at risk, or overstretch management resources. The two key gas projects under consideration comprise 1) Damhead Creek CCGT for 1.8GW near London, and 2) up to 2x 1.8GW at the Drax site to replace the existing coal units. Ultimately, the decision will be driven by the terms that can be agreed for capacity payments. Strategically, it may be more sensible to advance Damhead Creek first then await greater clarity on UK energy policy for the coal conversions at Drax since this could be tied to carbon capture if UK policy evolves to support this in the medium term. Biomass We expect an update on plans to help the company to reach a cost of <£50/MWh for the wood pellets. We would like to see a confident and clear plan delineated to achieve the cost target to give confidence that the biomass operations can continue when current support mechanisms expire (2027). We believe that the UK needs Drax long term, but the economics to support it require clarification. We hope the company will outline thoughts on possible longer-term support (e.g. capacity market eligibility), hedging and FX exposure given it has long-term hedges (through to 2024) in place at US$1.45/£ (biomass is imported from the US). Long term objectives We look for an update on the company’s carbon capture plans and various technology options. However, we do not anticipate major investment decisions on CCS before c. 2024. We may also get some insight on Cruachan pumped storage - both the services it can provide to the grid and its importance, and scope for expansion. Other – the retail business is small, but we would welcome updates on how this still fits and whether it is still core. Our view We believe Drax presents a value and growth opportunity, underpinned an attractive forecast yield of c. 6%. Although the growth path needs clarity, we see meaningful optionality in its various projects to drive further value.