Drax’s transformation ‘well underway’

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DRAX today said that its transformation to become a predominantly renewable power provider is well underway.

The company said its 2013 underlying earnings were ahead of expectations, reflecting good operations and healthy spreads.

During 2013, its earnings before interest taxation, depreciation and amortisation (EBITDA) fell by 23 per cent to £230m. The company said this reduction reflected increasing carbon costs.

Dorothy Thompson, the chief executive of Drax power station, which is based near Selby, 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 four per cent 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 to our investors.”