- Drax unveils plan to be “carbon negative” by 2030
- It is investing in biomass energy, although some environmentalists are also strongly opposed to this power source
Drax (DRX) has revealed that it will no longer develop gas-fired power plants, as it looks to become a “carbon negative” business by 2030.
The statement by the FTSE 250 power generator means plans to build Europe’s biggest gas plant in Yorkshire will now be scrapped, following years of protests by environmental campaigners.
Instead, Drax said it will invest more in sustainable biomass power, such as electricity generated by burning wood, although some environmentalists argue this energy source is also highly polluting. The company is set to close its two remaining coal-fired sites next month, as the UK government pushes energy firms to end use of the fossil fuel by 2024.
The group reported a surge in pre-tax losses in 2020, after incurring an exceptional charge associated with its decision to cease commercial coal generation in 2021. Excluding that, adjusted pre-tax profits were broadly flat ast £119m. More importantly, biomass generation rose 5 per cent to 14.1 terawatt hours. The dividend was also raised to 17.1p a share. Buy.
Last IC view: Buy, 273p, 30 Jul 2020
