Trading Statement

Drax Group PLC
18 December 2007

18 December 2007


                                 Drax Group plc

                                  (Symbol:DRX)

                                 Trading Update

Prior to entering its close period on 4 January 2008, Drax Group plc ('Drax' or
'the Company') announces the following trading update.

Contracted Position for 2007, 2008 and 2009

Since issuing the 2007 Interim Results announcement on 6 September 2007, Drax
has continued to trade in line with its expectations and to follow the stated
trading strategy of making steady forward power sales with corresponding carbon
and solid fuel purchases. Drax's aim is to deliver market level or better dark
green spreads across all traded market periods and, as part of this strategy,
Drax retains power to be sold into the prompt (within season) power markets.
Power markets have continued to be volatile and achieved power prices reflect
the timing of when sales were made. International coal prices have been at
record levels for much of the second half of 2007.

As at 11 December 2007 the contracted position for 2007, 2008 and 2009 was as
follows:

                                             2007           2008          2009

Power Sales - TWh                            24.7           19.7          14.3
comprising:
- Fixed price TWh at an average       24.4 at £45.2  14.4 at £45.6  9.0 at £41.7
  achieved price per MWh (note 1)
- Fixed margin TWh (note 2)                   0.3            5.3           5.3

CO2 emissions allowances hedged
(including UK NAP allocation,
market purchases and structured
contracts) - TWh equivalent                  25.2           19.5          15.2

Solid fuel at fixed price /
hedged (including structured
contracts) - TWh equivalent                  26.0           19.6          13.8

The contracted position for CO2 emissions allowances includes allocations made
under the EU Emissions Trading Scheme, market purchases and allowances due to 
be delivered under the terms of the Centrica contract (note 2).

The position for solid fuel includes estimated deliveries due under fixed price
contracts and the coal volumes specified under the terms of the Centrica
contract (note 2) the terms of which effectively remove the risk from Drax of
price movements in respect of that coal.

The Company will provide the next update on its contracted position in its 2007
Preliminary Results Statement which is expected to be issued on 4 March 2008.

Share buy back programme

The Board is pleased to announce that the Company has completed the £83 million 
share buy back programme announced in the Interim Results Statement issued on 
6 September 2007.  13,005,304 shares, representing approximately 3.7% of the 
shares in issue as at 6 September 2007, were purchased at an average price of 
approximately 638 pence. Following the purchase and cancellation of these 
shares, the number of ordinary shares in issue is 339,397,000.

Refinancing

The Interim Results Statement also noted that Drax expected to embark on a
refinancing of existing facilities later in 2007 (market conditions permitting)
to ensure balance sheet efficiency is maintained. Conditions in the debt
markets have continued to deteriorate since the Interim Statement was issued 
and the Company has therefore chosen not to proceed with a refinancing at the
present time. The Board remains committed to ensuring balance sheet efficiency
is maintained and will continue to keep the position under review.

The existing debt facilities expire at the end of 2010 and the scheduled
amortisation in 2008 is £35 million.

2007 EBITDA and Closing Cash Position Guidance

In the absence of unforeseen circumstances Drax expects that EBITDA for year
ending 31 December 2007 will be around £500 million. It further expects that the 
closing cash position as at 31 December 2007 will be in the range £55 million to
£60 million. The expected closing cash position reflects payments totalling £80
million made and to be made in the current year under the scheduled amortisation
programme for the senior secured debt facilities. Senior secured debt as at 31
December 2007 is expected to be £405 million.

In arriving at the estimate for the 2007 EBITDA and the closing cash position as
at 31 December 2007 Drax has taken account of:

•  Market prices as at 11 December 2007 for the uncontracted portion of 
   power sales, and solid fuel and carbon purchases for the period to 
   31 December 2007; and
•  Management's assumption that there will be no significant unplanned outages 
   for the period to 31 December 2007.

Distributions to Shareholders

The Board has previously stated that the Company will pay a stable amount (£50
million) by way of ordinary dividend each year (the base dividend) subject to
the availability of cash and appropriate reserves. In addition to the base
dividend, the Board has also stated that substantially all of any remaining cash
flow, subject to the availability of reserves and after making provision for
debt payments, debt service requirements (if any), capital expenditure and other
expected business requirements, will be distributed to shareholders. The Board
currently expects the next special distribution to be made by way of a special
dividend but continues to keep under review the most appropriate method for
making special distributions.

Within its 2007 Preliminary Results Statement on 4 March 2008, the Board expects
to recommend a final ordinary dividend of 9.9 pence per share, being
approximately £33.6 million, and the quantum of the special dividend in
respect of the year ending 31 December 2007. The level of special distribution
will take account of the closing cash position, the working capital, capital
expenditure and any other needs of the business, and the expected final ordinary
dividend.


Notes:

1. Fixed price power sales include approximately 1.0TWh supplied to Centrica in 
   the period 1 October to 11 December 2007 under the contract described in 
   note 2 below. The achieved price for this power is calculated according to 
   the contractual terms and is the sum of the relevant coal and CO2 prices and 
   the fixed margin applicable to the period. Prior to delivery this power was 
   classified as fixed margin power sales.

2. Fixed margin power sales include approximately 0.3TWh in 2007 and 5.3TWh in 
   each of 2008 and 2009 under the five and a quarter year baseload contract 
   with Centrica which commenced on 1 October 2007. Under this contract Drax 
   is supplying power on terms which include Centrica paying Drax for coal, 
   based on international coal prices, and delivering matching CO2 emissions 
   allowances amounting to approximately 4.8 million tonnes per annum. The 
   contract provides Drax with a series of fixed dark green spreads which was 
   agreed in the first quarter of 2006.


Enquiries:

Chief Executive: Dorothy Thompson
Finance Director: Gordon Boyd
[phone]

Drax Investor Relations: Andrew Jones
[phone]


Media:

Tulchan Communications
David Trenchard and Peter Hewer
[phone]


Website: www.draxgroup.plc.uk






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