A TOP power generator has seen its earnings drop by £50 million compared with last year but is now producing about a fifth of the UK’s renewable energy.

Releasing its half-year results for the six months ending on June 30, Drax Group PLC announced yesterday that its earnings before interest, tax and depreciation were £70 million, compared with £120 million in the same period in 2015.

The group also said about 70 per cent of its output was now renewable energy, providing approximately 20 per cent of UK renewable power. Drax produces a little under eight per cent of the UK’s total power needs.

The power station near Selby has converted two of its six generating units fully to biomass, in the form of wood pellets. A third unit is using 85 per cent biomass, and will be fully converted this autumn, said Andy Koss, chief executive of Drax Power.

He said the drop in earnings was “very much in line with market expectations”, having seen a fall in power prices and the removal of exemption from the Climate Change Levy.

Mr Koss said the situation was ‘disappointing’ financially, but Drax had done well operationally. “We are very pleased now to have fulfilled our ambition to be a predominantly renewable generator,” he said.

“We would like to be wholly renewable. We are ready to work with the new Government and the new department in charge of this to talk about further support for future conversions.”

The three generating units that were wholly or partly using biomass produced enough power for three million homes, the equivalent of Leeds, Manchester, Sheffield and York combined.

The group reported it had a healthy balance sheet and cash flows, and had been assured that the referendum decision to leave the EU would have no impact on its bid to gain European Commission state aid approval for the conversion of its third generating unit.

Group chief executive Dorothy Thompson said Drax’s ‘reliable and flexible’ power generation made it well-placed to support the UK’s electricity system as it prepared for ‘the tightest winter in many years’.

Mr Koss explained that the National Grid had said there would be little surplus capacity this winter. “I don’t expect blackouts, but certainly price hikes at certain times.

“We stand ready to meet any capacity shortfall we might meet.”

He said about 80 per cent of the wood pellets it used came from North America. Drax had to carefully measure the carbon footprint of their production, and make sure they came from sustainable sources.

Mr Koss said the decision to change to renewable energy had boosted employment not only at the power station but also in other areas, such as shipping and the supply chain. “I think it is clear that the work we have done to move from coal to biomass has not only preserved jobs but also created jobs in the local area,” he said.