News Column

Energy Drax follows Centrica in issuing profits warning

May 10, 2014

Drax, the operator of Britain's biggest power station, has become the second energy company in as many days - after Centrica - to issue a profit warning on the back of falling wholesale prices.

It blamed warm weather for hitting energy demand and lowering the price of electricity and said it had also been hurt financially by the falling value of its renewable energy subsidies.

Drax, which operates a power station near Selby, North Yorkshire, is in the middle of converting half of its boilers to biomass - or wood pellets - for which it receives renewable obligation certificates (ROCs), a form of subsidy which has no fixed price and is traded on the open market.

However, those subsidies are becoming less valuable because so much wind-generated power has came on to the wholesale power system in the UK - watering down the value of each ROC. Terry Macalister

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Source: Guardian (UK)

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