Drax boss responds to Yorkshire job cuts and questions over own future as Government deal hailed
A new Government contract for Drax running until 2031 has helped secure the future of its North Yorkshire power station and bolstered the company’s share price, its CEO has told The Yorkshire Post.
Drax posted its annual results for 2025 on Thursday morning, with shares in the company rising by more than three per cent in early trading in response despite drops in the firm’s profits. Shares in the company have risen by more than 45 per cent since September.
EBITDA profits were down 11 per cent from £1,064m in 2024 to £947m, with operating profit down from £850m to £241m and profit before tax dropping from £753m to £190m.
Will Gardiner, CEO of Drax Group, said revenues had been affected by falling power prices while there are two key factors behind the firm’s recent share price rises – including the recent power supply deal called a low carbon CfD (contract for difference) with Government which was confirmed in November and covers production from its biomass units between April 2027 to March 2031.
He said: "The future of the Drax power station beyond 2027 has been pretty unclear for a long time so the signing [of the contract] is really important.
"It means we have real certainty around the power station between now and 2031 and frankly I think it will go well beyond that. I think the market is reacting to that fact that’s in place. I think we and they and hopefully the rest of Yorkshire is excited about that too.”
He said the second driving factor is the company’s investment strategy, which has included a series of recent acquisitions relating to battery energy storage system projects relating to the storage of surplus renewable electricity.
The company is developing options for a data centre at Drax to assist with AI demand, while it has shelved plans for a carbon capture scheme at the site for the foreseeable future. Its results included a £48m impairment on its carbon capture plans, along with £337m relating to a paused Canadian pellet project.
It has been reported this week that almost 150 jobs could be lost at the Drax site in Selby by March 2027 as part of a broader company reorganisation which is resulting in around 350 jobs being lost – about 10 per cent of the current workforce.
The GMB union has said that between 89 and 148 jobs are to go at the Yorkshire plant – potentially affecting more than 30 per cent of the local workforce.
When asked by The Yorkshire Post whether the reported figures were accurate, Mr Gardiner said: “We haven’t been specific about what’s happening at the power station.
"We’re in a period of consultation that has started and we are working with our union partners on that. We are working to make sure we can get to the right outcome the best we can for the company and for the people involved. Across the group as a whole, we’ve said it will be 350-plus but that’s very much not just in Yorkshire.
"As we move into the next era for the company, we’re looking at doing different things and we need to have the right sort of organisation, structure and people for what we want to do.
"A final point which I think is really important is if we didn’t have that low carbon dispatchable CfD, it would be a lot more difficult.”
He said the restructuring process is expected to take several months. A recent report in Private Eye has suggested Mr Gardiner himself could leave as part of the restructuring.
When asked about this, he said: “I’ve been in this company for ten years and in this role for eight years. I think we have made a lot of progress creating the long-term future I am excited about.
"I think the next five years are going to be equally if not more exciting. As long as they’ll have me I’ll look forward to taking the company into that phase.
"We have a huge and exciting future. Our growth strategy is very aligned with what the UK needs for its own energy transition and the electrification of the economy and AI. We’re helping to drive a really important industrial transition for the UK.”