Drax welcomes Energy Secretary’s plans – but markets respond negatively

POWER station operator Drax has responded to a major speech by Energy Secretary Amber Rudd that said all remaining coal-fired power stations will be shut by 2025.

However the markets also responded, with the company’s shares dropping 4% yesterday, knocking around £40m off the company’s market value. The shares have lost two-thirds of their value in the last 12 months as investors worry about the robustness of Government support for biomass.

Drax has now converted three of its six units to use biomass after deciding 10 years ago to invest heavily in a future beyond coal.

Dorothy Thompson, Drax Group chief executive welcomed the consultation that Ms Rudd announced.

“We will be working closely with the Government on their proposals,” she said. “Over the last decade we’ve developed the latest technology to transform our power station and more than half the electricity we generate now comes from sustainable biomass.

“Coal and gas still produce the majority of our electricity and a truly diverse energy mix, including sustainable biomass, is the key to keeping the lights on in an affordable way.

“Getting coal off the system presents a huge opportunity for government to use existing power stations to generate affordable electricity using sustainable biomass.”