Graanul - comment

Drax announced this morning that it has entered into a contract with the UK Government to continue operating its biomass units at Drax Power Station beyond March 2027. This development alleviates one of the key concerns regarding Graanul’s end-user demand outlook. However, there remains no assurance that Drax will source biomass from Graanul, given Drax’s ownership of its own biomass production facilities in the United States.

Notably, the strike price agreed under the contract has been reduced compared with the level outlined in the original Heads of Terms. This adjustment reflects favourable foreign exchange movements, which are expected to lower the overall cost of biomass supply.

https://www.drax.com/press_release/low-carbon-dispatchable-cfd-contract-agreement/