By Susanna Twidale LONDON (Reuters) - British power company Drax Group on Thursday reported a 5.5% increase in annual profit, in line with forecasts and due to an increase in renewable power
Drax Reports Profit Increase with Renewable Power Boost
By Susanna Twidale
LONDON (Reuters) - British power company Drax Group on Thursday reported a 5.5% increase in annual profit, in line with forecasts and due to an increase in renewable power generation and an improved performance from its pellet division.
Drax, which has converted coal plants to run on biomass, provides around 6% of Britain’s electricity.
Earlier this month, the government extended subsidies for the biomass units that were due to expire in 2027 until 2031 but said they would be half the current level.
Under the new subsidy system the plants will run less frequently and only when the power is needed, the government said.
The new deal "is a major milestone for the business and provides the basis on which the site continues to generate electricity for the country,” CEO Will Gardiner said in the results statement.
Biomass power production was 27% higher last year compared with 2023 with few maintenance outages, the company said.
The company reported earnings before interest, tax, depreciation and amortization of 1.06 billion pounds ($1.34 billion) for 2024.
Green groups opposing the use of biomass say production of the pellets can contribute to deforestation and question whether the process of burning the pellets is really sustainable.
The company says its pellets come from wood residuals or byproducts from trees primarily used for lumber, and that sustainably managed forests can help to increase forest growth.
($1 = 0.7899 pounds)
(Reporting by Susanna Twidale, additional reporting by Raechel Thankam Job; Editing by Eileen Soreng and Susan Fenton)
