(Montel) UK energy firm Drax provided an estimated 12% of the UK’s renewable power over the past year – and 6% of total generation – amid a “solid performance” across its biomass supply chain, it said on Thursday.
“Our UK biomass supply chain has remained robust in the past 18 months, successfully managing the impact of Covid-19,” the generator said in its first-half results.
Drax – which operates a 3.9 GW plant in North Yorkshire, as well as some other related businesses – reported a significant rise in first-half operating profit, at GBP 52m compared with a loss of GBP 85m in January-June 2020.
“We believe that this was a solid performance, which reflected increased production of lower cost biomass, the acquisition of [US wood pellet producer] Pinnacle and an improvement in the customers business following the easing of lockdown restrictions in the UK,” it said.
This had offset additional biomass cost in generation, the company added.
Hedging and emissions cuts
Drax said it was in a “strong contracted power position”.
It had sold 29.3 TWh at an average of GBP 52.1/MWh for fiscal years 2021-2023 by the end of the reporting period, with average achieved prices of GBP 51.7/MWh for 15.9 TWh in 2021 and GBP 52.4/MWh for 9.1 TWh next year.
“[There will be] opportunities to capture higher power prices in future periods, subject to liquidity,” it said.
Meanwhile, Drax said it had cut the carbon emissions from its power generation by over 90% since 2012.
“Formerly the largest coal power station in Western Europe, Drax has this year ended commercial coal generation, sold its existing gas assets and transformed itself into one of the region’s primary decarbonisers,” it said.
“Replacing fossil fuels with clean power from renewables like sustainable biomass and hydro has enabled the UK’s electricity system to decarbonise faster than any other major economy,” said Drax CEO Will Gardiner.