Power station Drax described 2016 as a pivotal year for the company despite very challenging power and commodity markets.
The group said that 65 per cent of its electricity was generated from sustainable compressed wood pellets last year as it forges ahead with plans to ditch coal in favour of biomass.
The North Yorkshire firm, once one of the biggest polluters in Europe, reported earnings of £140m in the year to December 31, in line with guidance, but still below the £169m reported in 2015.
Chief executive Dorothy Thompson said: "2016 began with some of the most challenging power and commodity markets I have seen in my career and in a similar way to 2015 this created a headwind to profitability.
"Operationally, performance across the group has been good.
"The strong operational performance across our business helped us to respond to the financial challenge posed by the difficult commodity markets and the removal of Climate Change Levy exemptions."
The group said its biomass units delivered a record level of renewable electricity.
In 2016 Drax produced 16 per cent of the UK's renewable electricity from sustainable wood pellets.
"In total we produce enough electricity to power Sheffield, Leeds, Liverpool and Manchester together. We stand ready to do more," said Ms Thompson.
"Through our retail business we supplied 7.5 per cent of electricity required by UK businesses, whilst our pellet supply business produced 607,000 tonnes of compressed wood pellets."
Coal contributed just 9 per cent of Britain's electricity during 2016, down from 42 per cent in 2012.