Drax Group PLC (LON:DRX) recently published its trading update for the first quarter of 2022 in which it delivered a strong system support performance as reliable, renewable electricity continued to support UK energy security and helped to keep the lights on for millions of British homes and businesses.
It advanced its strategy to increase biomass pellet production, with another 400Kt of capacity commissioned from two new pellet plants in the US and it progressed the engineering design work for its UK BECCS project, which will deliver negative emissions for the UK and pioneer BECCS technology at scale.
DirectorsTalk caught up with Fund Manager Gervais Williams for his thoughts on the sustainable energy stock.
Gervais told us, “Clearly, what we’ve seen over recent years is less investment in carbon based energy and new investment in many of the newer energy sources; obviously wind turbines and Drax’s bio sustainable biomass products.
Ultimately with the rise in energy prices, a lot of these companies are more profitable than they were previously albeit that they have to deal with the problems with logistics in terms of getting deliveries of their biomass to their plants.
The key is that the company is in a strong position, it’s moved ahead of other in terms of converting power plants into biomass and it’s got good energy prices coming through. So, it’s being reflected in its share price, which is already improved, the ability to generate cash, as with iEnergizer, and most particularly, quite a strong market position relative to others which we’re quite excited about.”
Drax Group PLC (LON: DRX) is a power generation business. The principal downstream enterprises are based in the UK and include Drax Power Limited, which runs a biomass and coal fueled power station, Drax power station, near Selby in North Yorkshire. The Group also runs an international biomass supply chain business.
