Chief Executive's statement

Introduction

The business performed well in 2011 against a backdrop of volatile commodity markets and significant regulatory developments. In our generation and retail businesses, we maintained our focus on excellence in operations, tight cost control and disciplined capital project execution.

Preparation for our biomass expansion is now well advanced. We completed extensive combustion trials in 2011, and are now confident in our technical ability to be predominantly biomass fuelled. However, it is important to note that moving ahead with our plans remains dependent on securing appropriate regulatory support and a strong investment case.

Good financial results, the successful conclusion, in April, to the Group’s Eurobond financing structure and the bank refinancing we completed in July, leave us with a strong balance sheet which provides a solid foundation for future investment in the business.

Strategy

Our vision for Drax is to be a bold, customer oriented power generation and retail business, driven by biomass innovation. We have two key strategic initiatives to enable us to achieve our vision, namely, our project to convert Drax Power Station into a predominantly biomass fuelled generating asset, subject to securing the necessary regulatory support, and our programme for the expansion of Haven Power Limited (“Haven Power”).