Energy company profits: Owner of Britain’s biggest power station announces massive profit boost

After Drax earnt hundreds of millions in public subsidies, the profits have sparked outrage

Drax power station

It’s boom time for energy company profits. Earlier this month, fossil fuel giants BP, Shell and Equinor all announced record profits.

Now, the firm behind the biggest power station in Britain has reported an 84% increase in its annual profits. Drax, which operates the biomass plant, saw its underlying profits increase to £731m for 2022, up from £398m a year earlier. The firm also increased its dividend to 21p per share, meaning it paid out £84m to shareholders.

These bumper profits come as a perk of the rocketing cost of energy since Russia’s invasion of Ukraine.

In the same year, the company received £617m in government subsidies. This figure is slightly less than the £837m and £885m it earned in subsidies in 2020 and 2021 respectively.

Workers at Drax have been engaged in strike action after rejecting an 8% pay offer. Workers are set to walk out again on a series of dates throughout February and March.

The firm has also faced significant criticism for its wood-burning biomass operation – with environmental campaigners arguing its energy production is unsustainable. Campaign group Axe Drax claims that Drax has been burning more wood than the UK produces each year since 2015, and has branded the firm ‘the UK’s single largest carbon emitter’, a charge the firm denies.

Will Gardiner, Drax’s chief executive, has said: “Drax delivered a strong performance in 2022, and played a significant role in ensuring security of supply during a challenging year for the UK’s energy system.”

The news has been met with widespread condemnation from the climate movement and politicians, who have called for the government to stop providing subsidies to Drax.

Greenpeace UK’s head of UK climate, Mel Evans, said: “It’s maddening to see Drax announcing record profits while its workers strike to avoid a real-terms pay cut, and its customers suffer fuel poverty. Meanwhile Drax’s biomass power is built on deforestation, environmental racism and questionable carbon accounting. The Government needs to end the subsidies supporting this unsustainable business, claw back these massive profits and use the money to insulate people’s homes and scale up real renewable energy like onshore and offshore wind and solar.”

Green Party MP Caroline Lucas tweeted: “Drax is burning trees, polluting our planet, & raking in obscene profits. Yet rather than make them pay for the damage & help people with sky-high energy bills, Govt is gifting them a gigantic ‘eco’ subsidy worth *£800 million*. The greenwash has to stop.”

SNP MP Tommy Sheppard echoed this comments. He tweeted: “Taxpayer money should be spent on real emission-free energy sources, not on technology that pumps more carbon into the atmosphere, destroys forests and endangers wildlife. It’s time to end wasteful biomass subsides.”

Chris Jarvis is head of strategy and development at Left Foot Forward

Image credit: Alan Murray-Rust – Creative Commons

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