Drax posts strong yearly performance amid environmental controversy

Will Gardiner

North Yorkshire-based energy company, Drax, has unveiled strong financial results for the full year ending December 2023.

The company reported growth across key financial indicators, including a surge in Adjusted EBITDA (excluding Electricity Generator Levy) to £1,214m, marking a 66% increase compared to the previous year.

Additionally, basic earnings per share (EPS) rose to 119.6 pence from 85.1 pence, while the declared dividend per share increased to 23.1 pence from 21.0 pence in 2022.

The firm also reported operating profit to increase to £908m, an improvement from £146m in 2022. Profit before tax also increased substantially to £796m, compared to £78m in the previous year.

Will Gardiner, CEO, said: “Drax performed strongly in 2023 and we remained the single largest provider of renewable power by output in the UK.

“We have created a business which plays an essential role in supporting energy security, providing dispatchable, renewable power for millions of homes and businesses, particularly during periods of peak demand when there is low wind and solar power.

“Policy support for our UK BECCS (Bioenergy with carbon capture and storage) project continues to progress and we remain in formal discussions with the UK Government to ensure Drax Power Station can play a long-term role in UK energy security, creating thousands of jobs during construction and helping the country reach Net Zero.

“We have made further progress in our ambition to be a world leader in carbon removals and have visibility of high-quality, long-term earnings to 2042 and a strong balance sheet which supports returns to shareholders and investment in growth, both in the UK and internationally.”

However, Drax’s financial success comes amidst controversy. A recent BBC investigation revealed that despite receiving £6bn in UK green subsidies, Drax has been sourcing wood from ecologically important forests.

Documents obtained by Panorama uncovered Drax’s taking timber from rare forests in Canada, contradicting previous claims that these areas were protected from logging activities.

This has raised concerns about the company’s environmental impact and highlights the challenges of balancing economic growth with environmental responsibility.

Responding to the BBC, Drax said its wood pellets are “sustainable and legally harvested”.

The power station operator also denied taking wood from primary forests but said it would not apply for further logging licences in the Canadian province of British Columbia.

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