Auditel Consultant:
David Milnes

Drax resigned to Electricity Price Drop

13 Mar 2009 | Filed under: Energy

According to the FT.com, Drax, the electricity generator, said power prices would remain depressed for some time because of the recession, which has reduced demand for energy.

Coal and carbon prices have dropped recently, but so have electricity prices, leading to lower margins for Drax this year.

Dorothy Thompson, Chief Executive of Drax, said the UK’s looking shortage of power generation capacity, caused by the closure of the old coal-fired and nuclear plants, would be mitigated by the effects of the recession. She went on to say that the lower demand caused by the recession meant the “energy gap” would be pushed back a few years, but “the UK will still have real issues with generation capacity in 2015″.

So whilst energy prices look to be lower in the short term, the medium to long term could well see significant price rises.