Electricity demand has hit a new low, according to Drax
POWER station operator Drax said yesterday that the downturn had triggered an “unprecedented” slump in demand for electricity, as the group reported a dramatic slump in its first half earnings.
Chief executive Dorothy Thompson said the fall off in power requirements had been much sharper than contraction in the broader economy.
“For our sector it’s a very unusual movement… in fact unprecedented in my experience,” she said.
The news came as Drax posted a sharp fall in first-half earnings on the back of lower power prices. But it said profit should rise sharply in 2010 thanks to more favourable hedging contracts.
The company said it had already sold approximately 80 per cent of its output for 2010 at higher average spreads than for 2009.
Pre-tax profit at the company fell to £33.8m for the first six months, down from £149.5m year-on-year.
Revenues came in 12 per cent lower at £706.9m.
The group said its full-year expectations for core profits, which fell 27 per cent to £150m in the first half, were unchanged.
Thompson added that electricity demand was currently running at about six per cent lower than a year ago with households, where consumption is down about two per cent, proving more robust than industrial and commercial customers.
Earlier this month, Drax refinanced £235m of its debt, and extended the maturity of the borrowings to December 2012 from December 2010.