The signing of the “bridging” CfD in line with the earlier heads of terms de-risks a key element of Drax’s income out to 2031. The base level of support is attractive and we see good potential to rise above the collar given expected volatility in the power market towards the end of the decade. We see the removal of uncertainty over the agreement as allowing Drax to more fully consider options for the full utilisation of the assets at the Drax power station site in Yorkshire.
