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Drax Biomass Subsidies Rise To £558 Million

February 18, 2017
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By Paul Homewood


Drax have just published their provisional annual accounts for 2016.

Underlying earnings have fallen from £46m to £21m.

Once again, the figures show just how dependent the whole Drax operation is on biomass subsidies. Year on year, sales of ROCs have increased by £96m to £548m.




Just as significantly, the third biomass unit came on stream on Dec 21st. This receives subsidies via the CfD mechanism, which is much more generous than ROCs, which are worth about £40/MWh.

Under the Cfd, Drax receive a guaranteed, index linked payment of £106/MWh at current prices. With market wholesale prices of £47/MWH at the moment, this means that Drax will receive a subsidy of £59/MWh.

Just in ten days, this has generated £10m of income for Drax. Although it is unlikely to continue at this rate during summer months, it could easily bring in £300m in a full year.

Put another way, this year subsidies could easily amount to a third of total income.

And that’s not all. Drax also receives subsidies under the Capacity Market, under which it guarantees to provide standby capacity. Next year this will tot up to £23m.


It is little wonder that Dorothy Thompson, Drax’s CEO, is so keen to keep the scam going, regardless of the real environmental damage being done to forests in the US and Europe.

Without these subsidies, Drax would be broke.

If anything sums up the madness of the UK’s energy policy, surely this is it?





The full Drax accounts are here:

  1. Bitter&twisted permalink
    February 18, 2017 5:35 pm

    It’s what is known as “cash for ash”
    And guess who pays?

  2. February 18, 2017 5:38 pm

    Without these subsidies, Drax would be broke. With them others go broke or quit

  3. Timo Soren permalink
    February 18, 2017 5:57 pm

    As a north_american We will just watch the UK work to destroy its economic base and kill off its poor via low income taxation. We will mourn your losses but pray you get a handle on the education system and media that is indoctrinating your youth. The one bright side is perhaps you will when the left get old based on their party, give the left a low retirement or pension since they wasted the money don’t let them get it when old.

  4. Ian Magness permalink
    February 18, 2017 6:08 pm

    Does Mr T know about this madness? I’m, not sure we’ll get any change out of Mother Theresa on this issue, but perhaps the story can be brought to the, newly enlightened, US authorities’ attention? Maybe someone in the US would like to stop the appalling destruction of virgin forests for the sake of enriching a few corrupt business people and politicians over here? Business people and politicians who know full well that this is not only a terrible deal for the UK consumer but will also do nothing but increase atmospheric carbon dioxide levels here, in the US, and indeed in transit across the Atlantic.

  5. AlecM permalink
    February 18, 2017 6:08 pm

    The answer’s obvious: make children use pencils in school. Collect the shavings and ship them to Drax.

    Result: no sea shipping costs – they’re paid by the pencil makers. Only road and rail costs.

  6. richard walker permalink
    February 18, 2017 6:36 pm

    What about the energy needed to Cut down and transport this wood from America thence to Drax

    • Sparks permalink
      February 18, 2017 7:02 pm

      Not just America, they have cut down thousands of acres here in northern Ireland, actually some of which was “carbon foot print offsets” paid for through Al (burn the trees) Gore’s online “climate change” venture lol

  7. Sparks permalink
    February 18, 2017 6:56 pm

    Shovelling money to keep the gravy train going… obviously

  8. Robert Fairless permalink
    February 18, 2017 7:15 pm

    Great Britain became ‘Great’ because of its relatively cheap energy resource, namely COAL and London, its capital the largest city in the world. Inventiveness and business of all sorts flourished and we became the largest trading nation, had the largest Merchant Navy, carried most of the worlds goods, etc. etc.
    At the heart of it was coal and the way we utilised it. Nothing could match it, even oil. It required the follies of man to destroy our economic dominance. Apart from the destruction wrought by war we bred, or imported or adapted attitudes and beliefs that guarantee our demise. There was no shortage of fools brought up in the privileged society developed through our success to create and administer our downward spiral.
    Despite having huge coal resources underground we banned it and closed down our mines. The fact that there was no viable economic alternative to coal did not deter our faux intellectuals who were quick to devise and implement alternatives to coal however unprofitable. Politicians such as Ed Miliband, Chris Huhne, and Ed Davey were let loose to create maniacal schemes costing a fortune but doing nothing for our energy security. I mean, this last Christmas we gave owners of Wind Farms £6-7 million pounds NOT to produce produce electricity. The folly continues in many areas. Relative to this article is the destruction of thousands of acres of forest in the USA and the building of three factories to process tree trunks to wood pellets to be burned uneconomically at DraX Power Station. Meanwhile its Chief Executive has the audacity to tell us how successful is the Scheme.
    Around the world our competitors are using coal in the best interests of their country while we do the opposite. Our failure is inevitable and justified.

    • Paddy permalink
      February 19, 2017 7:26 am

      As I was taught in school, an island of coal in a sea of fish, therefore we would never need to go hungry or lack power – and look what happened.

      • Gerry, England permalink
        February 19, 2017 3:39 pm

        Yes, the traitor Heath gave away our fish at the last minute to guarantee we would be ruled by Brussels.

  9. Athelstan permalink
    February 18, 2017 8:46 pm

    I am not sure Christendom will be able to record its demise, the Mullahs aren’t great on recording history of any sort, literature, scribbled or scholarly.

    But if, one can imagine somewhere maybe in South America or Montana where they have little foothold.

    A future seer, some sage will reflect on how the political policies of a small but powerful claque of Internationalists destroy a culture and civilization fashioned by the west and that it took over two hundred and fifty years to come so far but through the green agenda UN agenda 21 or whatever they’ve renamed it these days and Internationalism, open borders and come one come all, a welfare state which lavished benefits on them all, workshy to a man and woman.

    In one small chapter, addendum perhaps. Maybe a minor detail, they just might record that Drax altered itself into a wood buring generating plant from a coal burning plant and that it took massive public subsidy to do just that and here a seer could just remark: Those whom the gods wish to destroy they first make green and then they enact the green agenda – and the west, its destruction was assured.

    • February 19, 2017 11:42 am

      Rupert Darwall has recently written a great book on the subject (and my local library has it, as well as the book by Ian Plimer, plus of course rubbish authors like Gaia Vince and Michael Mann). Don’t be put off reading it by my feeble and incomplete review here:

      • Robert Fairless permalink
        February 19, 2017 11:59 am

        The folly is so enormous it is difficult to express it concisely. It stems from the iniquitous Climate Change Act 2008 (via Ed Miliband) which was passed into law by a semi-comatose and ignorant House of Commons with only five MPs voting against. It put into law actions which are impossible to achieve in Physics and at the same time guaranteed the bankruptcy of our energy industry.

  10. John F. Hultquist permalink
    February 18, 2017 9:46 pm

    Regarding the trees being cut in the USA and shipped as pellets to the UK: There are lots of stories, but this is one:
    This is not about me, but I know people in the South. Maybe 150 or 200 years ago a man acquired a tract of land “in the sticks” along a sandy cart-track. The tract was about 8 miles from the nearest cross-road village and 40 miles from a coastal town. The man could grow most of what he and his small family needed on the land, trade a little, and sell a few things. They existed.
    About 20 years ago, the male-owner died, leaving an elderly wife and 5 children. Two of those stayed on the land, 3 trained for jobs and moved, but not far. The land could not generate enough income for 5 families. What to do?
    The trees became a way for the ancestral land to stay with the mother and 2 families while the other 3 families could benefit while giving up there claim. [A previous generation’s children each got a cow, with only one remaining on the tract.]
    So the farmed land was mostly planted to fast growing Pines for pulp wood and the rest of the trees on the tract were clear-cut, then replanted. This resulted in a decent economic outcome for all the families and the mother. Not even they think it is a better, or better looking, landscape.
    When you think of Drax – think of the hundreds of stories than can be told.

  11. stewgreen permalink
    February 18, 2017 10:19 pm

    So David Cameron’s family gets £1000/day windfarm subsidy
    And Drax receives subsidy of £1.5m per day …for burning trees

    …cos burning trees is dead ecological isn’t it ?

    • February 18, 2017 10:27 pm

      Delete ecological, insert expensive and absurd.

    • Robert Fairless permalink
      February 18, 2017 11:34 pm

      A few days ago someone reported that Cameron’s father in law (Samantha’s Daddy) now earns £2,000 PER DAY because he has had more wind turbines erected. He also gets several million pounds every couple of years from the EU for using or not using his land. Another monstrous scam!

  12. BLACK PEARL permalink
    February 19, 2017 1:00 am

    Have a feeling some news reporter is going to splash this enlightenment across a page or two 🙂

    • Athelstan permalink
      February 19, 2017 8:03 am

      Please lets hope so, David Rose might or, Chris Booker maybe?

  13. fretslider permalink
    February 19, 2017 2:40 pm

    How much would conversion back to coal cost?

    Are there any figures for that?

  14. February 20, 2017 9:21 am

    Why not spend it on the NHS?

  15. It doesn't add up... permalink
    February 20, 2017 10:08 am

    The things I note about the accounts:

    1) Their real profit is being made in exchange rate derivatives: they hedged forward their dollar cost for purchases of fuel out to 2021, which has moved sharply in their favour – a speculation that has turned out well;

    2) Although we get treated to details of the benefits of ROCs and CFDs, nowhere do we get a breakdown of green levies on the coal operation – or even a total cost of those levies;

    3) Whilst it should be clear that the biomass trains require subsidy to operate, we get no clear picture about the coal.

    In the early part of 2016, coal prices were the lowest they’ve been in years, although in the last few months we’ve seen something of a rebound:

    Absent green levies, you would have expected a highly profitable first half for coal operations.

    We have no clue about how their woodchips are priced, except that it is in dollars (as imported coal would be).

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