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Drax is to get subsidies for its biomass generation faster through a first-of-a-kind £80 million finance agreement with Lloyds Bank.
Under the agreement, Lloyds advances payment to Drax for Renewables Obligation Certificates (ROCs), which can otherwise take more than 12 months to come through.
The generation company earns ROCs for renewable electricity produced at itsYorkshirepower plant. It sells these to electricity suppliers to allow them to meet their green power obligations.
Michael Scott, head of corporate finance at Drax, said he was “very pleased” with the arrangement, which “is proving critical to delivering effective cash flow management”.
Drax is converting half of its six coal burners to run on biomass. The first started full commercial operation last April and the second is set to follow in April 2015.
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