Drax Group has hailed strong operational and financial performance in 2024, driven by increased renewable energy generation.
According to its annual financial report for 2024, the group saw a 5% growth in its adjusted EBITDA, hitting £1.064 billion, up from £1.009bn in 2023.
Drax attributed the growth to increased renewable generation, which saw a company record across its portfolio, and improved pellet production.
The company’s flagship 2.6GW Drax Power Station was recently converted to run on biomass.
In 2024, the site generated over 5% of the UK’s electricity and around 10% of its renewable power.
During this period, it produced on average 19% of the UK’s renewable power at times of peak demand and on certain days over 50%, when weather conditions brought down wind speeds.
The group brought down its net debt to £992m in 2024, from£1.22bn in 2023, for a net debt to adjusted EBITDA of 0.9 times, below its target ratio of around double.
Drax Group CEO Will Gardiner said: “Drax has delivered a strong operational and financial performance while supporting UK energy security. We produced over 25% more dispatchable renewable power in 2024, keeping the lights on for millions of homes and businesses, while supporting thousands of jobs throughout our supply chain.”
BECCS ambitions
This month saw Drax Group secure a contract for difference (CfD) for Drax Power Station, allowing it to operate beyond 2027.
However, it is still awaiting a separate subsidy to add carbon capture and storage capacity to the site.
Former Conservative energy secretary Claire Coutinho approved plans for the bioenergy with carbon capture and storage (BECCS) project in 2024.
Under the plans, captured CO2 emissions from the BECCS plant will be transported via pipeline and stored offshore as part of the BP and Equinor-led Northern Endurance Partnership project.
“Signing a heads of terms with the UK government for a new low-carbon dispatchable CfD for Drax Power Station is a major milestone for the business and provides the basis on which the site continues to generate electricity for the country, especially when the wind isn’t blowing and the sun isn’t shining,” Gardiner added.
“This is an investment in security of supply, which provides a net saving for consumers and helps deliver the government’s Clean Power 2030 goal. It also offers a potential pathway for long-term growth for our business, including options for the development of BECCS and a data centre at Drax Power Station.”
He added that the company is also making good progress with its growth ambitions for flexible generation, pellet production and international carbon removals business, Elimini.
“Our strong balance sheet supports returns to shareholders and the development of options for long-term growth, both in the UK and internationally.”
Drax Group added that it expects its full year 2025 adjusted EBITDA to be in line with analyst consensus estimates.
This includes the Drax Power Station creating over £1bn of estimated post-tax operating cash flow.
Recommended for you
