Drax today announced a 26% fall in earnings (EBITDA) to £169 million in 2015, down from £229 million in 2014. Profit before tax fell to £59 million from £166 million.

Chief executive Dorothy Thompson called the results “another strong operational performance” and said 2015 had been “a challenging year”.

Commenting on the future, she said: “We are clear on the challenges ahead and how we will respond. The fastest, most affordable and safest way to reduce carbon emissions is to further deploy the world leading biomass technology Drax has pioneered to upgrade more of the UK’s existing coal fired power stations to sustainable biomass. “With the right support framework, we stand ready to help the UK decarbonise further.” 

The company has already converted two of its units to biomass and Thompson said that in 2015 Drax “realised our vision to become a predominantly biomass fuelled generator”.

Commenting on the future of the company’s coal operations, Thomson told Reuters: “We may choose to mothball them, but what we are keen to is to work with government and find the right solution.”

Commenting on the results, Morgan Stanley said: “Drax results were a modest headline miss for 2015 but despite the challenging outlook for 2016, management is comfortable with EBITDA of just under ￡150m, which is above both Bloomberg consensus and MSe. This is driven by tight cost control and a better than expected hedging position.”

Subscribers only content: The New Power Interview with Dorothy Thompson: “System cost assessment will show benefits of biomass conversions”

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