(Alliance News) - Power plant operator Drax Group PLC on Thursday reported a "strong" set of annual results and also announced plans to stop coal-fired generation at the Drax power station.
Drax will end commercial coal-fired electricity generation at the North Yorkshire power station by March 2021, ahead of the UK's deadline of 2025. Formal closure of the coal units will end in September 2022 when capacity market obligations end.
"Ending the use of coal at Drax is a landmark in our continued efforts to transform the business and become a world-leading carbon negative company by 2030," said Chief Executive
"Drax's move away from coal began some years ago, and I'm proud to say we're going to finish the job well ahead of the government's 2025 deadline."
The closure will bring one-off costs of GBP25 million to GBP35 million, but will also reduce operating costs at the power station by the same amount. Some 200 to 230 jobs will be lost.
Turning to annual figures, Drax reported an 11% increase in revenue for 2019 to GBP4.71 billion, though it posted a pretax loss of GBP2.8 million from a GBP13.9 million profit year-on-year due to remeasurements of derivative contracts.
Selby, North Yorkshire-based Drax is paying a final dividend for 2019 of 9.5 pence per share, taking the year's total to 15.9p, up 13% on the year prior.
Drax said new hydroelectric and gas generation assets have been successfully integrated, while there was a "strong" system support performance. Reported carbon emissions fell 47% over the year.
"Drax has delivered a strong set of full-year results following the successful integration of new hydro and gas generation assets and made good progress with its strategic initiatives to build a long-term future for sustainable biomass and be the leading provider of power system stability," said Gardiner.
"Drax achieved these results while still delivering a 47% reduction in its carbon emissions compared with the previous year," the CEO added.
Looking ahead, Drax said it has "strong" forward power sales, and it is also looking at "attractive" investment opportunities. Drax will also look to reduce biomass costs and expand capacity.
Shares were 2.9% higher on Thursday morning in London at 267.25p apiece.
By George Collard; georgecollard@alliancenews.com
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