Drax on track for renewable future as it raises earnings target

DRAX today said full year earnings will be well ahead of current forecasts as it benefited from its new renewable energy operation.

And the Yorkshire power generator said that as well as a good performance from its first unit converted to burn biomass in place of coal, its coal generating units had also delivered a “solid operating performance”.

In an interim interim management statement, Drax said that since it announced half year results at the end of July “trading conditions in the markets in which we operate have continued to be good”.
 
“We have also benefited from solid operating performance from our coal generating units and the performance of our first unit converted to burn biomass in place of coal has been encouraging. In addition, commissioning of our new biomass delivery, storage and distribution systems is progressing very well.
 
“As a result, we now anticipate that full year EBITDA [earnings before interest, tax, depreciation and amortisation] and underlying earnings per share for 2013 will be materially ahead of current market consensus forecasts.
 
The group said it has strengthened its contracted position for power sales with additional sales of 3.4TWh for 2014.
 
The transformation from a fossil fuel power generator to using renewables is moving apace with a second unit to be converted in the second quarter of 2014.

“We now have over six months’ experience operating the largest converted unit in the world. As described above, the unit is performing well and, whilst optimisation work continues, we have developed technical solutions to deliver output of 600MW from a converted Drax unit.”

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