Drax wants extra help for biomass

DRAX, the operator of Britain's largest coal-fired power station, said it will take longer to prove the case for its first dedicated biomass plant, as it reported a 23 percent rise in first-half profits.
By The Newsroom
Published 3rd Aug 2010, 10:30 BST
Updated 3rd Aug 2010, 10:33 BST

The group commissioned a co-firing biomass facility in June but this is only running at two-thirds of capacity due to high biofuel prices.

Drax has said that new government support does not go far enough.

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"Regulatory uncertainty means development work for the first dedicated biomass plant will continue into 2011 before the investment case can be proven," it said.

The group, which is based near Selby, reported first-half EBITDA (earnings before interest, tax, depreciation and amortisation) of 184m, thanks to hedging and cost controls.

Shares in the group, which have lost 7.4 per cent so far this year, closed on Monday at 386.7p, valuing the group at 1.38bn.

Dorothy Thompson, the chief executive of Drax, said: "We have delivered an excellent performance across the business in the first six months of the year.

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"The decision taken last year to accelerate our hedged position for 2010 at higher average margins than for 2009 has improved our earnings. Strong operational performance and continued tight cost control have further enhanced profitability."

Related topics:Britain