Drax to convert first unit to biomass in April
Drax Group plc has released preliminary financial results for 2012, noting that its biomass transformation is well underway. According to company’s report, its first unit will be converted to biomass in April, with the second unit scheduled for conversion in 2014.
“Last year was pivotal for Drax. After ten years developing significant knowledge and experience in all aspects of using sustainable biomass in place of coal at our power station, we now have the mandate, means and expertise to transform the business into a predominantly biomass-fuelled generator,” said Dorothy Thompson, chief executive of Drax. “With government support and our financing secured, both in the second half of 2012, we are on track to convert our first generating unit fully to biomass in April of this year, with the second to follow in 2014.”
According to Thompson, EBITDA during the two years of transition will be adversely impacted by increasing carbon costs. However, she also added that Drax is confident it will deliver attractive returns for its shareholders as it moves beyond the two year conversion phase, in which significant capital is being invested.
Regarding biomass research and development activities, Drax’s report specifies it demonstrated technical capabilities to convert its units to run completely on biomass. The company also developed solutions to deliver reliable, flexible power generation with attractive rates of efficiency and output. The annual report also notes that Drax is continuing with on-going work related to the use of additives, corrosion tests and optimization of nitrogen oxide (NOx) performance.
Drax also reported that construction for onsite biomass handling and storage is on track, and that the company is making good progress securing fuel and logistics for the first two unit conversions.
Drax reported EBITDA of £298 million ($459.97 million) in 2012, a reduction when compared to the EBITDA of £334 million reported in 2011.