Drax profits up to £392m as Government talks on BECCS continue

The company also announced an adjusted EBITDA, excluding the Electricity Generator Levy, of £453 million, up from £225 million the year prior.

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.

“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.”

In March, Drax announced that it was pausing its £2 billion investment into BECCS until it received further clarity from the Government on its support for the scheme.

Although carbon capture and storage schemes were given support in chancellor Jeremy Hunt’s most recent budget, Drax said it needed its project to gain Track 1 Government support, without which its operations could become unviable.

An existing subsidy scheme for biomass plants is set to run out in 2027.

In its latest announcement, the firm said it was in “formal discussions” with the UK Government.

Earlier this year, the Drax also announced that it was looking at multiple sites in the US to create BECCS plants.

BECCS systems operate through the burning of wood-based biomass pellets, the co2 from which is then captured and stored underground.

The use of biomass pellets has been criticised by green groups, as well as a number of MPs, who claim that the method of energy production is not carbon-neutral.

Drax maintains that the use of BECCS is vital to achieving Net Zero, and that it only uses wood byproducts or residuals from trees used for lumber.