Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Drax begins strategic review after UK green policy changes

British power producer Drax , which has converted some of its power plant capacity to run on cleaner biomass, has started a strategic review of its business after the government indicated changes to renewable energy subsidies, Reuters has reported.

Drax, which owns one of Britain’s largest power stations, is expected to take a £30m hit on core earnings this year after the government removed a climate change tax exemption from which Drax had benefited.

Additionally, the British government has thrown into doubt whether it will offer further subsidy handouts to renewable energy projects, including biomass conversion plants, as it is reviewing how much money it can spend. It has already cut subsidies for solar plants and wind farms.

“We have always expressed an interest in complete biomass conversion but it only works if it sits within the government’s renewable objectives,” Drax chief executive Dorothy Thompson told Reuters.

The power producer reported an 18% rise in first-half core earnings to £120m ($187 million) thanks to higher production at its power plant.

It made a £53m profit before tax, compared with an £11m loss a year earlier, allowing it to offer a half-year dividend payment of 5.1 pence per share, up from 4.7 pence last year.

Drax shares were trading up 1.3% just after the market open.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.