Drax profit falls on high carbon charge
Drax, which runs Britain’s biggest coal-fired power station, saw its first half pre-tax profits fall 28 per cent yesterday to £206m as rising fuel and carbon emissions charges bit into its higher power prices.
The large coal fired power station near Selby, Yorkshire, which produces around 7 per cent of Britain’s electricity, said sales rose by one terawatt hour, compared to 13 terawatt hours in the first six months of 2008.
Drax sold the electricity it generated at an average selling price of £53.6 per megawatt hour, up 11 per cent on the first six months of the year. Domestic electricity supply firms are citing this increase for rising household energy bills.
The jump brought the company a 25 per cent increase in overall sales to £801m.
Drax, which is the country’s biggest single source of carbon dioxide, also saw its coal costs rise as a result of demand from China and the Fast East.
The firm said its fuel costs rose 34 per cent to £23.6 per megawatt hour of electricity produced. It added that coal prices have almost doubled to $218 a tonne in the last six months.
Full-year earnings at Drax, led by chief executive Dorothy Thompson, are expected to be just over £400m, but below the £506m it reported in 2007.
The firm also benefited from a solid operating performance over last winter – with plant availability of 93 per cent in the first three months of the year – at a time when rivals such as British Energy were affected by outages.
Drax said success in buying cleaner-burning organic matter, like wood, straw or other materials, to burn with coal in its 4,000-megawatt plant, meant it could generate 500 megawatts of power from biomass by 2010, up from its previous forecast of 400 megawatts.
The company also said it is piloting a project which could see 100,000 pellets made from locally-sourced straw burned in its plants.
