Yorkshire energy giant Drax contributed £493m to the region’s economy last year, helping to support 4,500 jobs, research has shown.
The Group’s UK operations, which includes Drax Power Station - Europe’s largest decarbonisation project near Selby in North Yorkshire - had a far larger national impact, with the knock on effect through companies in its supply chain last year contributing £1.2 billion to the UK economy and supporting 14,150 jobs.
“This report shows Drax is supporting more than 14,000 jobs across the UK, with the vast majority resulting from our upgrades to biomass technology.
The findings come from researchers at Oxford Economics studied the impact of Drax Group on the UK’s economy as the company nears completion of a major high tech engineering and infrastructure scheme to upgrade half the generating units to use sustainable biomass in place of coal.
Employment covered a wide range of sectors including high-skilled manufacturing of industrial components, engineering and technical machinery, construction, IT, professional business services and transport.
Drax Group chief executive, Dorothy Thompson, said: “This report shows Drax is supporting more than 14,000 jobs across the UK, with the vast majority resulting from our upgrades to biomass technology.
“The economic benefit has reached all parts of the country. We have been the catalyst for rejuvenation and growth across the Northern Powerhouse with port expansion on the coasts of East Yorkshire, the North West and North East.
“Drax is now the UK’s biggest single generator of renewable power. With the right support from Government we aim to upgrade more of our electricity production to using compressed wood pellets. This would provide a further boost to the UK economy, and deliver increased carbon savings.”
Oxford Economics used three measures to calculate Drax Group’s GDP contribution: the direct activities of the Group and its contractors, activity and employment in the supply chain of the Group and its contractors, and spending by all employees involved.
Drax Group’s procurement with suppliers in Yorkshire and Humber last year reached £336 million and included TEi, specialists in processing engineering and piping in Wakefield, which designed and installed 8km of pipework for delivering biomass to the generating system.
The report also analysed the economic impact of upgrading Drax to use compressed wood pellets instead of coal. It reveals this project has thus far generated £203 million for the local economy and supported 3,450 jobs in Yorkshire and Humber.
The news will come as a welcome boost to morale at Drax after it saw its underlying profits more than half during the first six months of this year following a Government U-turn on renewable energy tax breaks and a difficult energy market.
The then David Cameron-led Government’s decision to scrap the Climate Change Levy exemption in July 2015 resulted in underlying profits falling 59 per cent to £17m in the six months to June 30.
Sam Moore, managing director of consultancy at Oxford Economics, said: “Drax Group makes an important economic contribution to Yorkshire and the Humber, and the UK more widely. Its activities generated over £1 billion in GDP last year, and sustained thousands of jobs across the nation.
“In addition, ambitious investments by the group and its partners in regional biomass infrastructure have driven huge demand, and supported many more thousands of jobs.
“The Drax upgrades to use biomass in place of coal are also environmentally and strategically very significant, in the context of the wider challenges for the UK’s energy system.”