Drax outlines continued progress in financial statement

The Drax Group plc has released financial results for the first half of 2013, reporting EBITDA of £120 million ($181.72 million), a reduction when compared to the £154 million reported for the same period of 2012. The lowered EBTDA is attributed to increasing carbon costs.

“In the first half of 2013 we have delivered good operating performance across the business during a period of extensive activity at the Drax site,” said Dorothy Thompson, chief executive of Drax.  “The first converted unit was commissioned at the beginning of April, generating electricity from sustainable biomass in place of coal. The unit, which is the largest converted unit in the world, has been operating safely and delivered expected performance, using the interim storage and delivery systems in place. We will start commissioning the new bespoke systems later this year. We are investing significant capital this year and next to transform our business, with earnings during this period impacted by the increasing costs of carbon. However, as we move beyond this investment phase and replace substantial quantities of coal with sustainable biomass, we are confident that we will deliver attractive returns for our shareholders.”

A statement provided by Thompson in the financial report specifies the company is pleased with the technical performance of its first converted biomass unit, which came online in April. The unit has achieved output levels of up to 585 MW with no loss of flexibility. “To date, we have not encountered significant slagging, fouling or corrosion inside the boiler. Emissions of nitrogen oxides have been significantly lower than for the coal units. The efficiency modifications we have made so far have been effective and the overall combustion process is stable,” said Thompson in the statement.

However, the load factor of the first unit was 57 percent. This is significantly lower than Drax expects to deliver in the future. “Normally, biomass units would be expected to have very high load factors when available, reflecting the favourable economics of biomass generation,” said Thompson in the release. “However, logistics have been challenging and as a result generation from this converted unit was materially constrained over the period by fuel availability. This was due to the temporarily limited biomass storage facilities on-site, as well as the use of some temporary supply chain facilities off-site pending delivery of the permanent facilities.”

A full copy of the financial report is available on the Drax website.