Profits at Britain’s largest power station rocket following surge in energy costs

Profits for the operator of Britain’s biggest and most controversial power plant have increased by more than tenfold as a result of higher energy prices.

Drax’s profits before tax in 2023 will be £796m, compared to £78m a year earlier. Most of Drax’s profits were generated by its wood-burning facility in Selby (Yorkshire).

Selby Plant, which receives generous subsidies from the government, has been widely criticized by environmentalists for burning wood chips imported .

Drax claims that this is a method of sustainable energy generation.

Selby is vital for the UK’s energy safety because it produces more than 4% of the country’s electricity.

This also helps to stabilize the grid, as it can be used during times when wind and solar output is reduced by low winds or lack of sunlight.

Drax’s second main asset is the hydroelectric facility in Cruachan, located in the Scottish Highlands.

Will Gardiner said, “Drax performed well in 2023, and we remain the UK’s largest renewable energy provider by output.”

We have created a company that plays an important role in supporting energy safety, supplying renewable power to millions of homes and business, especially during peak demand periods when wind and solar energy are low.

Drax claims that it produces carbon-neutral energy because trees absorb CO2. The trees will release the same amount of CO2 if they are burnt, making the process carbon neutral so long as new trees are planted.

The use of “biomass fuel” as a source of power in the UK has been questioned more and more. Fuel, which accounts for about 10% of UK power generation, is only considered low carbon if it comes from forests that are replanted and the wood otherwise would be wasted.

The Canadian environmental groups have accused Drax this week of “ecocide”, claiming that it has been burning trees from protected ancient woodlands in Canada.

Drax responded that it sources its biofuel from “sawmill and harvesting residues as well as fibres with little or no other market value.” We don’t own forests or mills, and we aren’t responsible for licensing and harvesting forests.

Gardiner stated that Drax would continue to push forward with plans to install carbon capture units in its boilers. The Selby plant would be carbon-negative, as CO2 would have been captured by trees and buried forever.

The carbon capture plans, however, are still in limbo as Drax awaits the result of a government consultation to determine whether or not existing subsidies for Drax’s biomass units will be extended beyond the expiration date of 2027.

The extension will allow the company to continue its project until 2030, when it can begin carbon capture. Today is the last day for government consultations. A decision should be made in April.

Mr Gardiner stated: “Policy Support for our Carbon Capture Project continues to Progress and We Remain in Formal Discussions with the UK Government to Ensure Drax Power Station Can Play a Long-Term Role in UK Energy Security.”

The Electricity Generator Levy was introduced by the Government in response to the increase in profits due to the global rise of energy prices.

Drax Group spent £205 million on this project.

As a result of these and other items, the adjusted profit after tax for the group was £469m, compared to £338m by 2022.