Yorkshire-based power station group Drax Group (LSE:DRX) said profits this year will top one billion pounds but said it wants clarity on the government’s plans before investing further in the UK.
The controversial power generator, which has been accused of using virgin forests in North America to provide biomass pellets for its power plant, said underlying profits this year would be at the higher end of analysts forecasts of £993-1,039 million.
Flexible power generation and pellet production had done especially well, said Will Gardiner, chief executive.
Currently, Britain is having to rely on its gas and fossil fuel plants due to an 'unusual' period of very low winds and weak sunshine hitting supplies from renewables.
"Our Flexible Generation and Pellet Production businesses are making good progress towards our target to deliver post-2027 recurring EBITDA over £500 million,” he said.
Gardiner added that while both carbon storage (BECCS) and flexible generation were included in the government’s net zero plans, its further investment “remains contingent on gaining further clarity on the frameworks for continuing the operation of the power station beyond 2027 and supporting BECCS conversions from 2030”.
Drax confirmed it has set up a US-based BECCS company Elimini, to will focus on overseas carbon capture projects. The business will develop projects providing 24/7 power and carbon removals outside the UK, Gardiner said.
Drax recently sold its SME supplier Opus Energy and said the results would contain a £7 million charge for overcharging customers between 2003-23.