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Drax announce better-than-expected profits
1:11pm Tuesday 18th February 2014 in News
Drax power company has announced better than expected profits despite soaring taxes on burning coal.
New jobs are also being created in Hull and Immingham to transport larger quantities of eco-friendly fuel to the Selby site, bosses revealed.
The business has just launched a pioneering programme to convert many of its coal-burning generators to burn biomass: mainly left-over timber from the construction industry.
Increasing carbon costs have made a near £69m dent in profits – down to £230 compared to 2012’s £298m – but earnings are ahead of expectations despite this.
There are ever-increasing carbon costs on the industry from a combination of EU legislation and the Government’s Green Energy taxes.
Some 800 people are directly employed on the Selby site, plus the 600 on contracts.
Peter Emery, Production Director of Drax Group PLC, explained: “I think that the Drax business is reinventing itself as a significant supplier of renewable and sustainable power it is very positive news for Drax, its shareholders and employees - and it gives the business a long term future to look forward to.
“The 2013 profits were seen as low point due to conversion. But share prices are strong and employees feel there is a real future for the business.
“On the Drax site in the short term 20-50 jobs are being created. On the logistics side, they have to transport twice the volume so it will be significant increase in port and rail jobs.”
They are going to modify a second unit to run mainly on biomass in April, and plans are in the pipeline to convert a third or even a fourth, making Drax the biggest renewable plant in the world.
Biomass fuel is mainly timber from sustainable forests but also agricultural sources such as straw, oat and peanut husks.
Dorothy Thompson, Chief Executive of Drax, said: “As expected, the increasing cost of carbon drove earnings down year on year.
“Recognising this, we have been investing significant capital to transform Drax into one of the world’s largest renewable generators, burning sustainable biomass.
“At the same time we have delivered strong operating performance across the business.
“In 2016, we expect half of Drax to be fuelled by sustainable biomass, some 4% of the UK’s electricity.”
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