North Yorkshire power generator Drax has announced a doubling of its profits.
Announcing its half-yearly results today (Thur), the Selby-based company reported that in the six months to June 30 that its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) excluding the government’s Electricity Generator Levy reached £453m compared with £225m in the same period last yar.
The adjusted EBITDA (including EGL) for 2023 was £417 million, compared to £225 million in 2022.
Drax has also reported an operating profit of £392m (compared to £207m in 2022) and profit before tax increased from £200m in 2022 to £338m.
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This was based on sales of £4,090m in the first half of the year, compared with £3,557m in the same period last year.
The company credits the growth on its strong system support and generation performance.
In a statement, Draxs says it is currently progressing options for £7bn worth of ‘strategic growth opportunities’ in 2024-2030.
These primarily related to its BECCS carbon capture storage plan at Drax, in which Drax is prepared to spend up to £2bn.
However, its BECCS investment is paused, subject to further clarity on support for this technology at the flagship power plant.
Drax is currently in formal discussion with the UK Government about seeking a bridging mechanism to ensure revenues from its legacy renewable contracts for the power plant stay in place during the transition period from 2027 and BECCS becomes operational.
Drax says it is the country’s largest source of renewable power by output, primarily using woodchips imported from the US and Canada. Such biomass generation at Drax Power Station amounts to 9% of annualised UK renewables.
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Drax did not generate any electricity from coal in 2023 and is currently decommissioning coal-based equipment, following a formal closure in March.
Will Gardiner, CEO of Drax Group, said: “In the first half of 2023, we delivered a strong system support and generation performance, providing dispatchable, renewable power for millions of UK homes and businesses. Drax Power Station remained the UK's single largest provider of renewable energy by output during the period.
“We continue to focus on our role as the UK’s leading generator of flexible renewable power and our ambition to be a world leader in carbon removals. To that end, in the US, we have made good progress screening options for BECCS projects which can deliver long-term, large-scale carbon removal and attractive opportunities for growth.
“We are excited about the opportunity for BECCS in the UK and are in formal discussions with the UK Government to facilitate the transition to BECCS at Drax Power Station by 2030. Our plans could create thousands of new jobs in the Humber region, help the UK meet its carbon removals targets and support long-term energy security.”
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