It comes only weeks after government said biomass subsidies allowed Drax Group to make ‘unacceptably large profits’. The owner of the Drax power plant has reported its highest earnings since the coronavirus pandemic only weeks after the government said that controversial subsidies for biomass power had allowed it to make “unacceptably large profits”.
Drax Group said its adjusted earnings rose to £1.06bn last year, narrowly above its profits of £1.01bn the year before. The profits are largely built on the billion-pound subsidies given to the North Yorkshire power plant every year to support its biomass generation, which is considered a form of renewable energy despite claims from climate scientists that it may increase emissions in the short-term.
The government agreed earlier this month to extend the group’s subsidies beyond a 2027 deadline to 2031. It insisted that the plant, which supplies about 5% of the UK’s electricity, would be used only as backup for when wind and solar power was in short supply, playing a “much more limited role” in future.
The energy minister Michael Shanks said at the time that the previous subsidy arrangement had allowed Drax to make “unacceptably large profits” and that the new deal would be a “step-change in value for money and sustainability”. The FTSE 250 company’s power generation increased by more than a quarter last year, according to Drax, with only a single major planned outage, which it completed ahead of schedule.
Will Gardiner, Drax Group’s chief executive, said: “We produced over 25% more dispatchable renewable power in 2024, keeping the lights on for millions of homes and businesses, while supporting thousands of jobs throughout our supply chain.”. Sign up to Business Today.
Get set for the working day – we'll point you to all the business news and analysis you need every morning. after newsletter promotion. He described the new subsidy arrangement as “a major milestone for the business” that would mean the site would “continue to generate electricity for the country, especially when the wind isn’t blowing, and the sun isn’t shining”.
