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Drax Subsidies Rise To £789M

March 2, 2019

By Paul Homewood


Without public subsidy, Drax would have no future at all!

Their newly published Annual Accounts for 2018 show that subsidies from ROCs and CfDs have risen to £789 million, from £729 million in 2017, for biomass generation.

Biomass generation totalled 13.8 TWh, so the subsidy works out at £57.17/MWh


ROCs were worth £468 million:


Whilst CfD income added a further £321 million:




On top of these subsidies, of course, Drax receives payment for the electricity sold, amounting to £983 million, equating to £53.71/MWh (based on 18.3 TWh).

In other words, biomass subsidies are worth more than the value of power sold.


Despite this government largesse, Drax only managed to turn in a paltry profit of £37 million.



As I pointed out last year, without subsidies, Drax would be bankrupt.

Is there any company in the UK that is more subsidised than Drax?

  1. March 2, 2019 3:20 pm

    Somebody should inform our incompetent Government that Claire Perry is subsidising Drax in order for it to increase its CO2 emissions compared to the emissions when it was burning only coal.

  2. Athelstan. permalink
    March 2, 2019 3:57 pm

    The tale of Drax and subsidizing inefficiency on a scale well beyond my fathoming.

    This is absolutely unarguably, totally bonkers but then Claire Perry, Amber Rudd, Philip Hammond and boss one green fairy Theresa Maybot are senior members of the UK government.
    A journey to perdition via UK deliberately designed disaster its energy policy, this horlicks of a charade would embarrass the bodgers on NK.

    This is the Lav/Tory legacy and the future – darkness:

    • J Burns permalink
      March 4, 2019 2:17 pm

      I know it’s a figure of speech, but it would be a mistake to dismiss it as ‘bonkers’. This is pure, unadulterated corruption, hidden in plain sight. Hugo Chavez would have felt at home in the upper echelons of the British political class.

  3. March 2, 2019 4:15 pm

    Obviously, the tree farmers in the colonies need to jack up their prices because Drax has a backer with very deep pockets and unlimited financial resources.

  4. Stephen Lord permalink
    March 2, 2019 4:19 pm

    Perhaps when the hoax is over and hysteria dies down it can be returned to coal fired. More likely based on US experience new gas fired generators will be cheaper.

    • Adam Gallon permalink
      March 4, 2019 9:18 am

      Gas will be a lot cheaper. Deep mined coal is completely uneconomic (Mind you, subsidise that as much as Drax’s woodchips are subsidised & I wonder what the picture would be?)

      • It doesn't add up... permalink
        March 4, 2019 11:25 am

        The current coal price for API2 CIF Rotterdam 6,000kcal/kg (=7MWh/tonne) quality is about $75/tonne, which is just over $10/MWh on a GCV basis, or about $30/MWh generated assume an efficiency of a third. NBP gas is under 45p/therm on a prompt basis, although gas for next winter is trading around 60p/therm, so £15-20/MWh on a GCV basis, or twice that assuming achieved CCGT efficiency of 50%. So coal is cheaper.

  5. markl permalink
    March 2, 2019 5:41 pm

    The clear cutting of vast forests in Eastern United States to feed the Drax and personal heater beasts across the pond is an environmental disaster being covered up by politicians and the media. No newspaper, TV, or radio program has given the subject more than cursory coverage yet there are eco terrorists dangerously sabotaging logging and living in trees to stop the same actions in the Pacific Northwest. People are blind to so called renewable energy that defeats conservation and environment preservation as long as the belief is it supplants fossil fuels.

  6. March 2, 2019 6:56 pm

    Is there any company in the UK that is more subsidised than Drax?

    Look to the rail industry for contenders.

    • Gas Geezer permalink
      March 2, 2019 7:34 pm


    • It doesn't add up... permalink
      March 4, 2019 12:58 am

      Ørsted must be a contender. All those offshore windfarms get high subsidy rates.

  7. jack broughton permalink
    March 2, 2019 7:27 pm

    Surely it should be noted that if Drax burned low cost coal without stupid carbon taxes, it could be very economic. In addition, the support to the wind / solar industry failings has a much larger value than is allowed by the accounting procedures in use for UK power generation. The UK desperately needs to keep what is left of its coal fired power stations as support for gas and storage capacity: coal is also the lowest real-cost power source, as most other countries seem to have realised.

  8. jack broughton permalink
    March 2, 2019 8:03 pm

    Have tried to glean some engineering data from the annual reports, but they are the usual “annual report BBB” format, showing that they are good at money management but very little about their skill at power generation.

    Seems that they generated about 20 TWh in 2017 no way of seeing what they paid the North Americans for wood or where the coal that they used was sourced etc to see how they really manage their business. However, 20 TWh amounts to an annual load factor of about 60% which would not be very impressive for a base load station. The old CEGB system was far more honest and was transparent: this lot are obtuse and misleading. Money laundering as opposed to showing how good or bad they are at power generation.

    • It doesn't add up... permalink
      March 3, 2019 3:35 pm

      It’s very hard work, but it is possible to get data by unit for each half hour settlement period a day at a time here:

      For Drax, set the BM Unit ID to DRA (it acts as a search filter) and it will produce data for units 1-6 when available.

      A complete list of every unit is available, so it can be used e.g. to look at the performance of individual wind farms.

      • It doesn't add up... permalink
        March 3, 2019 3:40 pm

        Footnote on comment process: having entered the comment I now get an appended string to the URL that looks like this:[comment number]&moderation-hash=[long hex string]#comment-[comment number]

        It seems WordPress have changed their software.

  9. Harry Passfield permalink
    March 2, 2019 8:56 pm

    “Despite this government taxpayer largesse…”
    Someone had to say it, I guess. I just wish there was an MP willing to champion the taxpayer against these subsidy farmers. Voters would rather save (their) real money than CO² in a fictional climate scare.

  10. Graeme No.3 permalink
    March 2, 2019 10:06 pm

    Presumably the support for “intermittent” wind and solar is OK by Drax provided there is an uninterrupted supply of subsidies.

  11. Arthur Clapham permalink
    March 3, 2019 8:49 am

    Was Drax profitable as a coal burning station? I would like to think it was.

    • It doesn't add up... permalink
      March 3, 2019 5:16 pm

      If my sums below are correct (and I accept I may have got it wrong), then coal was taxed at £95/tonne in 2018 – or over £40/MWh generated.

  12. It doesn't add up... permalink
    March 3, 2019 4:29 pm

    I suppose really we ought to credit Drax with the various green taxes they pay on their coal operation as an offset to the green subsidies. Having looked through the accounts, they don’t appear to report this information anywhere, so we have to try estimating. Coal is 25% of 18.3TWh generated, or 4.575TWh. Assume one third efficiency, and the gross heat content of the coal would have been 13.725TWh, which at 7MWh/tonne implies a burn of 1.96 million tonnes.

    If I understand the basis correctly (there may be tweaks such as carbon allowances), then the average EU ETS price in 2018 is about €15, to which should be added the UK’s floor price of about £18 per tonne of CO2, making about £31/tCO2. Assuming about 85% C by mass, that gives a bill of 1.96x31x0.85×44/12 or about £189.4m.

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