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Drax Power Station aerial shot
JOBS at Drax Power station are safe despite a decision to scrap plans for a massive new plant and a reduction in headline profits.
Senior managers announced they would drop their plan to build a dedicated £700 to £800 million biomass plant at the site on the same day they revealed preliminary results for 2011, which show a drop in key finance performance indicators.
Peter Emery, Production Director for Drax Group PLC, confirmed: “We have decided to cancel the dedicated plant we were going to build on the Drax site.”
This week’s decision was signposted last November in a management statement which said the investment case for new biomass plants was “highly challenging” and that the plants were “in doubt”.
If the new plant had gone ahead it would have created 600 construction jobs but fewer than 100 operational jobs. The plant would have had a 300 megawatt capacity.
Bosses now say the company is on a more “cost effective” course. Instead of the up to £800 million cost of the new plant, it will spend £50 million on infrastructure to allow existing biomass capacity in the main plant to increase by the same 300 megawatts.
The “co-firing” biomass capacity, currently at 500megawatts would then reach 800 megawatts – 20 per cent of the total 4,000 megawatt capacity of the otherwise coal-fired plant.
They stressed none of the existing 760 jobs at the Drax site would be affected, indeed there would be job creation in construction this year.
The decision to scrap the dedicated plant was announced alongside an almost £60m drop in Drax’s headline profit. However, Mr Emery said the performance was far better than anticipated in a volatile market.
The latest EBITDA figure (which represents profit before interest, tax, depreciations, and other factors) has dropped from £392 million in 2010 to £334 million in 2011.
But Mr Emery said that if government agreed even slight increases in financial support for Drax’s biomass production, it could mean more people being taken on at the huge power plant, which is vital to the economy of the local area.
Chief executive Dorothy Thompson said the company delivered excellent performance in 2011. It had a strong balance sheet to go forward with.
Selby and Ainsty MP Nigel Adams said the company continued to invest “a lot of money to safeguard jobs in the Selby area”
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