Profitable Drax ready to invest in renewables (From York Press)

Profitable Drax ready to invest in renewables

8:12am Tuesday 21st February 2012 in Selby & Tadcaster By Julie Hayes, Business editor

POWER giant Drax has said it is ready to invest to be a predominantly biomass-fuelled generator after growing profits.

In its preliminary results for the year ended 31 December 2011, the business grew pre-tax profit to £338 million, up from £255 million in 2010. Revenue increased from £1.6 billion to £1.8 billion.

The power station, based at Drax near Selby, said it had made good progress in its trials in burning biomass, such as willow and straw, and had established a secure and flexible supply of materials.

Drax said it would invest £50 million during 2012 in storage and plant modifications to enhance its current co-firing capability, in which it burns both coal and biomass. But is said further investment of up to £450 million to make the plant predominantly biomass-fuelled would depend on further regulatory support for biomass from Government.

Dorothy Thompson, chief executive, said: “We delivered an excellent performance across the business in 2011, with continued good operations and tight cost control contributing to good financial results in a volatile market. We have a strong balance sheet, which provides a solid foundation for future investment in the business.

“We continue to operate at less than our installed renewable biomass capacity because of the current low level of regulatory support. However, the results of our biomass combustion trials give us full confidence in our technical capability to become predominantly biomass fuelled.

“In 2011, as part of a review of renewables support, Government announced its intention to incentivise from 2013 the most cost effective renewable technologies, including increased support for electricity fuelled by sustainable biomass in existing coal-fired power stations. With a moderate uplift in the proposed support level we could, over time, maximise the potential for producing this low cost renewable electricity.

“Drax is ready to transform itself into a predominantly renewable generator, but to do so we need appropriate regulatory support, and to that end we look forward to the timely conclusion of the Government’s current review.”