Drax’s first half earnings fall

British power producer Drax Group reported a 15 per cent fall in first-half earnings, hurt by the increasing cost of Britain’s carbon tax.

The Yorkshire-based operator of one of Europe’s largest coal-fired power stations, Drax said earnings before interest, tax, depreciation, and amortisation (EBITDA) fell to £102m for the six months which ended June 30, from £120m a year earlier.

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“In the short term, the increasing cost of the UK carbon tax drove EBITDA down year on year,” Chief executive Dorothy Thompson said in a statement.

The utility warned in May that full-year EBITDA and earnings per share would come in below market forecasts and it said today that this outlook remained unchanged.

In a bid to reduce carbon costs, Drax plans to convert three of its six coal-fired power generation units to use biomass by 2016. One was converted last year, and the other two conversions are planned for next year.