Drax Regulatory News (DRX)

19 December 2013

DRAX GROUP PLC

(Symbol: DRX)

DRAX UNITS ARE HIGHEST RANKED PROJECTS FOR EARLY CFDs

Through the Electricity Market Reform package, the Government is introducing Contracts for Difference ("CFDs"), which are fixed price long-term contracts, to support the development of low carbon electricity generation. They are expected to become available in late 2014.

In September 2013, Drax applied for Investment Contracts under the Final Investment Decision Enabling ("FID Enabling") for Renewables process for the conversion of two of our generating units to burn sustainable biomass in place of coal. These are early CFDs which will provide certainty for investors in advance of the normal CFDs becoming available.

Earlier in December, the Government announced that 16 projects ("Qualifying Projects"), including both Drax units, had met the minimum threshold evaluation criteria for Investment Contracts under the FID Enabling for Renewables process. The Government also confirmed that the final strike prices on which the Investment Contracts will be based will be £105/MWh for biomass conversion (in 2012 prices), and set a budget cap for the FID Enabling for Renewables process from 2015 to 2021.

The Government has today informed Drax that its two units are provisionally the top ranked Qualifying Projects, and that both are provisionally affordable. This is an important step in the Investment Contract award process.

Commenting on today's rankings, Dorothy Thompson, Chief Executive of Drax, said:

 "We are pleased with the news that the Government has provisionally ranked our two projects highest amongst Qualifying Projects for early CFDs. This reflects the deliverability and cost effectiveness of this important renewable technology.

"We will now participate in the next stages of this process, which will conclude with the award of Investment Contracts in spring 2014."

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Enquiries:

Drax Investor Relations: Michael Scott

+44 (0) 1757 612 230

Media:

Drax External Communications: Melanie Wedgbury

+44 (0) 1757 612 438

Brunswick: Richard Jacques / Nina Coad

+44 (0) 207 404 5959

Website: www.drax.com

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