UK energy utility major Drax Group plc has posted half-year results for the six months ended 30 June 2018 that despite being impacted by two unplanned outages, the Group has left its full-year expectations unchanged.
According to a statement, Drax continues to be at the heart of decarbonising UK energy, securing government support to convert a fourth unit to biomass and piloting a Bioenergy Carbon Capture and Storage project, supporting the UK Government’s carbon capture and storage ambitions. However, first half EBITDA was lower, principally due to two specific generation outages, full-year EBITDA expectations remain unchanged.
We made excellent progress with our pellet production business, driving down costs while producing at record levels and our B2B Energy Supply business continues to increase customer numbers. We also remain on track with our investment projects: the conversion of a fourth unit to biomass, and the development of our OCGT and coal-to-gas repowering options. We remain focused on safe and efficient operations and returns to shareholders and expect to declare a full year dividend of GBP56 million for 2018, said Will Gardiner, Chief Executive of Drax Group plc.
The company has seen an 80 percent increase in pellet production from its US subsidiary Drax Biomass Inc., reaching 0.7 million tonnes compared to 0.4 million tonnes in H1/2017 along with a 12 reduction in cost per tonne of pellets produced.
Currently operating three wood pelleting plants in the US southeast with an annual combined total nameplate capacity of 1.5 million tonnes, the company has completed the commissioning of its LaSalle BioEnergy (LaSalle) plant in Urania, Louisiana that was acquired from German Pellets in April 2017.
Expected to reach full nameplate capacity of 450 000 tonnes per annum in Q1 2019, La Salle Bioenergy has concluded a co-location and offtake agreement with Hunt Forest Products for low-cost sawmill residues at LaSalle. Furthermore, Drax has revealed that it has invested GBP11 million in a rail spur enabling reduced transport cost to its Baton Rouge port facility.