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Drax results to see BECCS plans thrown into limelight once again

Published 22/02/2024, 11:55
Updated 22/02/2024, 11:55
© Reuters.  Drax results to see BECCS plans thrown into limelight once again

Proactive Investors - Drax Group (LON:DRX) will update investors next Thursday, 29 February after a busy year for its plans to develop bioenergy with carbon capture and storage (BECCS).

FTSE 250-listed Drax was given the green light to retrofit its North Yorkshire biomass power plant last month with the carbon capture technology, leaving the company now just seeking finance before pressing ahead with the plans.

Analysts believe this may not be so clear cut though, with CitiGroup noting around the same time that open government support for such a controversial technology may be lacking in an election year.

Drax’s current subsidy agreement with the government, which guarantees payments of £118.54 per megawatt for some of the energy from its biomass plant, will run out in 2027.

Any news on future subsidy arrangements could therefore be key in Thursday’s report, given energy is far more expensive to produce using biomass than the likes of wind.

Drax also recently laid out plans to create a new business solely focussed on the rollout of BECCS, which it is planning for the US too.

The company, which also owns the likes of hydro and gas assets, updated most recently in December that results should sit in line with analysts’ expectations.

That is, for Drax to report revenue of £7.96 billion for the year, up on the £7.76 billion reported last time around, with diluted per share earnings sitting at 114.4p, against 82.2p.

Shares have fallen by 36% over the past year meanwhile, to sit at 426.70p as of Wednesday’s close.

Read more on Proactive Investors UK

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