The total amount of power is around 13.1TWh and the volume of the contract is equivalent to a load factor of approximately 8% for the period October 2010 to September 2015.
Under the terms, similar to the existing 600MW supply contract which commenced in October 2007, Drax will supply power to Centrica at a price set with reference to international coal prices and agreed fixed clean dark spreads, while Centrica will deliver matching carbon allowances.
The agreement, which secures additional volumes of coal-indexed power, is said to be in line with Centrica’s strategy to ensure secure energy supplies for its customers and to diversify its fuel mix, further reducing its overall exposure to the gas prices in the UK.
Dorothy Thompson, chief executive of Drax, said: “As with the first Centrica agreement in 2006, this not only gives Drax options over how and when to dispatch power but is also consistent with our progressive hedging policy. Moreover, locking in dark green spreads out to 2015 clearly demonstrates that there is appetite for deals beyond 2012.”
