Member Article

Selby’s Drax coal power station reports sizeable pre-tax losses

Selby’s Drax power station has reported pre-tax losses of over £60 million, a total decrease of 23% on last year.

Their EBITDA for the year ended 31st December was £230 million, in 2012 it was £298 million. According to the statement, this year on year reduction in earnings isdriven by increase in carbon costs.

Drax produces 7-8% of the UK’s electricity demand, and is in the middle of a transition to biomass.The conversion of their first generating unit to burn sustainable biomass in place of coal is proving “successful” says the company.

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, including notably, good output, efficiency and reliability from our first converted unit.

“We are well placed to secure CfD Investment Contracts for our second and third unit conversions.

“We look forward to the conclusion of the government’s contract award process this Spring. These contracts will underpin the investment required to secure the sustainable biomass supply chain for our second and third unit conversions.

“We are targeting April 2015, when these contracts become effective, for our next unit conversion and quarter four of 2015 at the earliest, for the third.

“In 2016, we expect half of Drax to be fuelled by sustainable biomass, some 4% of the UK’s electricity. In delivering this transformation, we will provide cost-effective, reliable renewable power to consumers, secure jobs at Drax and across the UK supply chain and deliver attractive returns for our investors.”

This was posted in Bdaily's Members' News section by Clare Burnett .