Report reveals impact of Drax Group to UK economy

By Drax Group | October 23, 2017

British energy business Drax Group contributed almost £1.7 billion towards U.K. GDP in 2016 and supported over 18,500 jobs across the country. The findings were revealed in a new report looking at the economic impact of Drax’s U.K. operations, which includes Drax Power Station—a nationally significant energy asset that provides power to six million homes.

Researchers at Oxford Economics found that Drax Group’s contribution to the British economy has increased by 34  percent year-on-year following the Group’s acquisition of Opus Energy, a large retail company which supplies energy to businesses.

Based on Drax’s operations in the energy sector and its use of British businesses across its supply chain, the report estimates that the company contributed £1.67 billion to the economy and supported 18,500 jobs last year, a rise from 14,150 in 2015. The vast majority of this impact is felt outside London and the South East—of the £1.67 billion Gross Value Added by Drax Group only £155 million was in London, meaning 90 percent of the Group’s economic impact was experienced outside of the capital.

Employment supported by Drax’s activities covered a wide range of sectors including high-skilled manufacturing of industrial components, engineering and technical machinery, construction, IT, professional business services and transport.

Researchers at Oxford Economics used three measures to calculate Drax’s GDP contribution: the economic activity associated with the day-to-day running of the business; the activity created by the purchase of goods and services from its suppliers; and the wages the company’s employees and suppliers’ employees spend in their local area.

A breakdown of the GDP generated by Drax Group shows all regions of the U.K. benefited. Highlights include:
- £419 million created in Drax’s heartland of Yorkshire and the Humber, where its power station is located.
- 760 jobs for the North East and £59m contributed to the local economy.
- £232 million generated in the East of England, where one of Drax Group’s business retail suppliers, Haven Power, is based.
- 1,600 jobs supported and £130 million generated in Wales, the home of Drax Group’s recently acquired business retail supplier, Opus Energy’s Cardiff offices
- 900 jobs supported in Scotland and £76 million generated in its economy.
- 950 jobs sustained and £83 million contributed to GDP in the South West.

“As a British energy company, we are committed to working with U.K. businesses right across our supply chain, said, Dorothy Thompson, CEO of Drax Group. “This report shows that Drax now supports more than 18,500 jobs across the U.K. and with our new business strategy in place, we believe we will boost this number further.

“With the power station’s sophisticated supply chain and our growing retail business, we are making a positive economic contribution in every region of the U.K.,” Thompson continued. “We are an important player in an energy sector that is crucial to delivering a low carbon economy as part of the Government’s wider Clean Growth Strategy for the country.”

“Since upgrading half of the power station to use sustainable biomass instead of coal, Drax is the U.K.’s biggest single site generator of renewable power—producing enough for four million households.”

“We are also exploring options for a coal-free future, including the repowering of our remaining coal generating units either to biomass or to gas, with battery storage of up to 200MW.”

“If developed these options for gas and battery storage show how we could upgrade our existing infrastructure to provide capacity, stability and essential grid services, as we do with biomass.”

“This will allow more renewable energy sources onto the system, paving the way for increased carbon savings across the U.K. as a whole and helping us to meet the government’s ambitions for a coal-free system by 2025,” Thompson continued.

Osman Ismail, senior economist at Oxford Economics, said, “Drax Group makes an important economic contribution to Yorkshire and the Humber, and the U.K. more widely. Its activities generated almost £1.7 billion in GDP last year, and sustained thousands of jobs across the nation.

“In addition, the implementation of the Group’s new strategy means that Drax is uniquely placed to impact the wider challenges for the U.K.’s energy system through helping to balance the Grid.”

“The Opus Energy acquisition solidifies Drax’s principal activities of generating energy and supplying energy services to businesses and directly impacts a number of different regions in the U.K. in terms of both job creation and contribution to GDP,” Ismail continued.