Drax Biomass Subsidies Rise To £558 Million
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: