Carbon Negative Ambition
Drax is targeting carbon-negative operations by 2030, leveraging re-engineered assets to deliver one of the most ambitious decarbonisation strategies in the UK.

Critical Role in Net Zero
The company provides system-balancing services — including long-duration storage and low-carbon reserve — while continuing to supply around 5% of UK electricity.

Attractive Valuation
Trading well below NAV, Drax is currently priced in line with legacy utilities despite its forward-looking portfolio. Our central case valuation highlights significant re-rating potential.

BECCS OpportunityCommercial-scale BECCS deployment positions Drax as a global leader in negative emissions technology, supporting UK and international decarbonisation pathways.

Business Model:
Vertical integration across biomass supply, generation, and retail enhances resilience, optionality, and long-term cash generation.

Investment Overview

IDrax has transformed from a coal-based generator into a diversified clean energy company. Its biomass generation, pumped hydro storage at Cruachan, and gas assets provide flexibility and stability to the UK grid. The company is progressing plans to deploy BECCS at scale, with the potential to capture 16 million tonnes of CO₂ annually and deliver net-negative emissions.

Despite its strategic importance in enabling the UK’s net zero transition, Drax is currently valued as if it were a stranded high-carbon utility. With policy support, its assets could underpin significant long-term value creation.

The full Longspur Capital research note provides scenario-based valuations, detailed analysis of BECCS economics, and insights into Drax’s role in the UK energy system. To access the complete report, registration on the Longspur Capital research portal is required.

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