Member Article

Drax praises renewable operations as pretax profits rise by £138m

North Yorkshire energy provider Drax Group has praised a strong operational performance for the company in 2016, despite weakness in power prices, sterling depreciation and uncertainty following the UK’s decision to leave the European Union in June.

2016 was a pivotal year for Drax, marking the completion of its biomass transformation project which commenced in 2012, and the announcement of a new strategy to deliver long-term sustainable value.

Releasing its preliminary results for the year ended December 31 2016, the company reported £2,950m in consolidated revenue - £115m lower than in 2015.

Electrical output from Drax’s Generation business of 19.6TWH was significantly lower than 26.7TWH in 2015, as lower market power prices resulted in the firm’s coal-fired units being out of merit for much of the summer.

However, the business reported pretax profits of £197m, a hefty increase on the £59m for the same period last year, whilst net debt has decreased to £93m from £187m in 2015.

Drax is now a predominantly renewable power generator, having converted three of its generating units to only use sustainable biomass, which has resulted in carbon savings of more than 80% compared to coal and the creation of a completely new supply industry.

Dorothy Thompson, Chief Executive of Drax Group plc, said the firm is playing a vital role in helping to change the way energy is generated, supplied and used as the UK moves to a low carbon future.

“With the right conditions, we can do even more, converting further units to run on compressed wood pellets” said Dorothy.

“This is the fastest and most reliable way to support the UK’s decarbonisation targets, whilst minimising the cost to households and businesses.

“In a challenging commodity environment Drax has delivered a good operational performance with 65% renewable power generation.

“The acquisition of Opus Energy and rapid response open cycle gas turbine projects are an important step in delivering our strategy, diversifying our earnings base and contributing to stronger, long-term financial performance across the markets in which we operate.”

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