DRAX is to invest £700 million in converting its Selby power station to burn mostly biomass, it said in its interim results.

The business reported that revenue was up slightly, from £866.3 million in the six months ended June 30, 2011 to £867.9 million. Pre-tax profit was down from £168.7 million in 2011 to £141.2 million after the business spent about £15 million more in research and development costs than it originally expected.

It invested £70 million during the first half of the year into biomass infrastructure, and expects to spend a total of £170 million on biomass in 2012. It has started construction of new fuel delivery, storage and distribution systems for biomass, such as willow and straw, which is expected to complete by mid-2014, with the first converted unit being operable in the second quarter of 2013.

Dorothy Thompson, chief executive, said: "As a result of our excellent technical progress and the Government's conclusions on support levels for sustainable biomass, we will now move forward with our strategy to transform Drax into a predominantly biomass-fuelled generator.

"We will do this by converting progressively three of our six generating units to biomass, in the full confidence that we have both proven the technical solutions to deliver reliable and flexible generation at attractive rates of efficiency and output, and are making good progress with our biomass sourcing.

"This transformation will secure a significant number of jobs, not just at Drax but also in the sustainable biomass supply chain."

The three generating units would require between seven and eight million tonnes of fuel per annum, the business said.