Drax Subsidies Hit £893 Million Last Year
March 19, 2022
By Paul Homewood
Drax have just published their latest Annual Accounts:
https://www.drax.com/investors/announcements-events-reports/annual-reports-and-accounts/
Subsidies for their biomass operation reached £893 million last year. All of this is added to our electricity bills:
EBITDA for the year was £398 million, so Drax would effectively be bankrupt without their subsidies.
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NOT A LOT OF PEOPLE KNOW THAT 
Two things stand out to me on what you show.
ROC sales coming in at £538.6m; and
Pellet sales coming in at £157.4m
While we might view Drax as evil, they are only taking the steps that the Government – and those before – have forced them to in order to keep their business going. Still no response from Shell as to why the huge increase in the standing charge.
Changing subject – I see the wind has gone out of the idea of refilling containers with foodstuff from a dispenser and the refill shops are shutting down.
Parasites.
And that’s being polite
The Drax operation is an expensive con. Carbon neutral it is not, sustainable it is not. Trees cannot replenish fast enough to claim otherwise. But we all knew that didn’t we?
We knew, but those who made the decisions on our behalf chose to ignore all the facts in pursuit of virtue signaling, a.k.a. the waste of other people’s money
and of course keeping the gravy train rolling.
I agree with Tim. Follow the money. Someone influenced the government to call trees renewable and they were likely not being altruistic, and knew of the logical fallacy.
I think you will find that the trail leads to our former Higher Government – the EU. They have decided that burning trees is good and then instructed our government to follow suit. Yes, we could change that now we are free of them but as in so much our government won’t or is intellectually incapable of making changes to improve this country.
Only “so much”? How about all?
It has allowed the use of neonicotinoids for the sugar beet industry. A tiny step that will hopefully see them back in full use that will prevent the likes of Jeremy Clarkson losing a whole planted field to weevils. But, yes, the amount the government fails on is in the high 90s percentage wise.
By the time any replacement trees have grown, any ‘climate crisis’ will either have been forgotten about or it will be too late anyway.
In the meantime the subsidies just get bigger and bigger.
The Drax Annual Report should have had trees after they had been felled by a chainsaw.
The replacement trees will take 80 years to regain the carbon that was in the original trees, so a carbon debt is building up that will take 80 years to reach equilibrium where the carbon burnt is balanced by the carbon in the trees re-growing.
Let’s say 20 years of growth to make the calculation easy. Each year I burn 20 years of growth of trees. So after 10 years I have burnt 200 years of tree growth. Each year I plant the same number of trees that cut down. So after ten years I have replaced 10+9+… of growth. That’s 55 years so I “owe” 145 years of growth! After 20 years I owe 400 years gross and have replaced 210 so my debt has grown to 190.
This is renewable? Why not leave the trees in place, burn gas and plant new trees?
I think I read the accounts slightly differently. Drax admit to a more complex trading operation around ROCs which actually form the bulk of their subsidies. It’s not entirely clear whether ROC sales might include resales of additional purchased ROCs. They are trading in weather derivatives as a hedge against ROCs rising in price because of shortfalls in wind generation, for instance.
On the bald figures it appears that some ROCs are sold internally to their Customer Business that deals directly with large consumers and therefore must present ROCs for its sales, while others are sold directly into the ROC market for retailers to purchase. Adding the total ROC sales of £881.2m to CFD income of £234.9m I make the subsidy total £1,116.1m. Not sure what the rules are over paying for electricity used in pumping at Cruachan pumped storage. Unstated, but they also have an income from the sale of REGOs as well no doubt. This financial year those will be material because they have increased in price sharply.
Who cares about a billion pounds added to our electricity bills when we are deciding whether to eat or heat? Certainly not these renewable energy con artists.
Not the least disgusting thing about Drax’s management, and their taking advantage of the crass stupidity of the virtue signalling, arts grad politicians; nailing the UK’s colours to Zero Carbon mast of tree burning to save the Planet; is the certainty that they have some highly qualified and experienced engineers (some of which I have personally worked with in the past), who absolutely must be aware that Ruinable Energy is not, and never will be, fit for purpose.
I’m not sure how they can bear to look in a mirror. Sorry, they make me want to puke.
Re looking in the mirror: something along the lines of finding it difficult to disagree when keeping your job depends on agreeing? And what other employment opportunities exist in their location?
Mr. Brumby, well said ! There is Sooo much ‘Political Capital’ attached to ALL of this ‘Carbon Neutral’ and ‘Carbon Trading’ magic trick, both in Global Governments and in the Media. Common sense is nowhere in sight. Thanks to Paul we have a forum in which to present opposing and scientific perspective counter to ‘Prevailing Consensus’ but our voices are falling into the great abyss. I have spent the last 15 years researching and exposing these false doctrines of The Big Green Propaganda Machine . . . to no avail.
Somehow, somewhere someone has to throw that Knock-Out punch and expose the ‘Collusion’ hiding in some document somewhere . . . to expose the ROT at it’s core . . . We can only hope and pray that . . . that day is neigh . . .
It’s the politicians idiotic virtue signalling rules they are complying with. You blame the wrong people. The bosses’ job is to make money for the company, thereby keeping all the jobs going.
I agree. If they had not taken the free cash on offer then Drax would be scheduled to be blown up like all the other coal plants. We should be grateful that the government denied them more free cash to convert the rest of the plant so it has been able to burn coal to keep the grid from collapse.
While the whole concept of burning american wood with higher kg.CO2 / MWh than coal was always indefensible on any sane logical grounds, it prevented the carbophobics from shutting Drax down and wrecking it: maybe it will soon be converted back to coal and provide another 20 years of low cost power. If sense and logic take over (a big if) we could also use UK surface-mined coal…………
Clean Energy – Bio-Fuels – Man-Made hydrocarbons . . . . ‘Wood is currently the largest contributor to this Bio-Fuel energy market, accounting for as much as 45 percent of all renewable energy consumed’. https://www.wri.org/blog/2017/12/insider-why-burning-trees-energy-harms-climate#:~:text. . .
From P 8 . . . https://www.academia.edu/73548362/Electric_Cars_Burn_31_More_Energy_than_Gas_Cars_Revised_
Such an intellectual Travesty . . . . Such a fraud . . .
Jack#
Thank you and Paul of course.
Drax was specifically built where it is because it sits on top of a (reportedly) 600 year supply of coal.
Hopefully, long after I am gone, a future generation will grow some brains and use the coal.
How to Clean up Pollution and Save Planet Earth
This power generating station was the first in Canada to install scrubbers to help reduce Sulphur dioxide emissions. It has an electrostatic precipitator that removes over 99% of particles in the flue gases. It has special burners to limit Nitrogen Oxide emissions. An upgrade began in July 2004 which saw a Titan ProAsh facility that recaptures 75% of the fly ash produced by the generating station. Water from the Smoke Stack Scrubbers is recycled. This eliminates the use of a ‘Tailings Pond’. The effluent removed from the water has resulted in the production of a Synthetic Gypsum Byproduct (Drywall) which is then sold, all over North America.
Belldune Coal Fried Power Generating Station – A Poster Child for Clean Energy!!
Mostly steam coming out that chimney . . . Like what we see at all Natural Gas Plants!!
Environmentalists are screaming to have this plant shut down . . . not because it is clean . . .
Because it burns coal . . . Clean Energy . . . somehow bad??
Please . . . Let’s find some common sense and bring it home to Environmentalism . . .
It is long overdue that humans visit the truth of Science in all of our Environmentalist Narratives. Clean-up the Planet of foul effluent first. Set CO2 on the back burner for now. Our obsession with CO2 is NOT helping the clean-up of the Environment. It is holding back the progress towards cleaning up of the pollution that is truly destroying the Environment on Planet Earth.
The by-products from burning fossil fuels:
1. Sulfur dioxide (SO2), which contributes to acid rain and respiratory illnesses
2. Nitrogen oxides (NOx), which contribute to smog and respiratory illnesses
3. Particulates, which contribute to smog, haze, and respiratory illnesses and lung disease
4. Mercury and other heavy metals linked to both neurological and developmental damage
5. Fly ash and bottom ash, that are residues created when power plants burn coal
All are significantly reduced when we invest $800,000 million. As at Belldune . . .
Let’s work smarter, Not Harder . . . Be Visionaries, with a Goal – Clean-up Now!
Meanwhile, in other news, the last cooling towers at Ferrybridge Power Station were demolished on Thursday night.
Ferrybridge is a short bike ride from Drax, as Paul will confirm. 50 years of reliable, affordable electricity.
Not to fret.
We will soon be “The Saudi Arabia” of Wind.
(TM:- Boris Johnson).
“Saudi Arabia” as in autocratic state founded on and promoting certain religious beliefs, where only the “elite” has any freedom but enjoys enormous wealth.
“Wind” as in the emanations of Boris’s flabby arse.
Personally it madness the haste with which the old coal stations are being demolished often for politician to push the button for a photo op. Any sane country would have mothballed them on a just in case basis – oh like the Ukraine crisis!!
I am certainly no conspiracy theorist but I rally do have to wonder exactly what is behind this “haste”. In the past we actually built standby plants which were colloquially known as “Cold War” units specifically for such emergencies. I worked at one during the miner’s strike when it was called into service and it managed to run it at over 110% capacity (seems almost impossible but true)
https://en.wikipedia.org/wiki/Littlebrook_Power_Station#Littlebrook_D
This was blasted down at the first opportunity as were all the other oil units. Crazy.
‘Carbon Allowances’ are A One Trillion Dollar annual Scam
Carbon Trade is Already Covering the Equivalent of One Half of World Energy Emissions of $1 Trillion . . .
Intercontinental Exchange Inc. (ICE) has said that trading in ‘Carbon Allowances’ has reached a record volume in 2021 on its various markets — the volume of Buying and Selling reached the equivalent of about one half of ALL global energy emissions. A total of 18 billion tons of ‘Carbon Allowances’ were traded in 2021. Equivalent to an estimated 1 trillion in US dollars. ICE trades by far the biggest market share in the Global market, although other exchanges including the European Energy Exchange (EEX) also handle sizable volumes, as well.
This is a reflection of how companies are using these markets to manage and price their ‘Climate Risk’, as well as meet their ‘Compliance Obligations’. The traded contracts have included a record 15.2 billion tons of EU carbon allowances and a record 2.4 billion tons of California carbon allowances as well as 346 million tons of Regional Greenhouse Gas Initiative allowances. Then also, following its launch in May 2021, there is the new 255-million-ton U.K. carbon allowances.
This year ICE will be expanding their Carbon Credit Markets to value and support the preservation of ‘natural assets’, as well as launching their first carbon futures index on contract to provide access to the global cost of emissions in one trading instrument. This from . . . Gordon Bennett, Managing Director of Utility Markets at ICE.
This whole system is a Self-Fulfilling Prophesy . . .A game of Slight of Hand . . . A Magician’s Trick . . .
Who will stand against this Injustice? . . . Who will go on the Record? . . . Where is the Media??
From . . . https://www.academia.edu/71023588/Batteries_Renewable_Energy_and_EV_s_The_Ultimate_in_Environmental_Destruction
Did you just write ‘Gordon Bennett’ there Jim? Good one!
To say an Electric Vehicle (EV) is a ‘Zero Emission’ vehicle is not even remotely true! Since about 40%of the electricity generated in the United States comes from coal-fired generating stations . . . you could say that forty percent of the EVs on the road are Coal-Powered . . . Interesting . . . OH, and let’s not forget OHM’s law on resistance . . . at least 28% of the electricity produced is lost as Heat. Soo . . . To use 100 kwh of in an electric car . . . You must produce at least 128 kwh of electricity at source . . . .
If I approached a bank for a loan based on the current Drax business model, outside of green wet dreamery, what chance would I have of being successful in pitching for support on a model that relies entirely on a government subsidy to turn a profit? The 1st question any sensible bank manager would ask of me is, that if subsidies were withdrawn tomorrow, is your plan economically viable without state support? Answers on a postcard please to HMG.
Good question Mack . . . but then we should ask the same question of Tesla . . . $2 Billion in carbon credits amount to almost their entire profit for last year . . . The international agencies that decide these things have declared Electric Cars . . . Emissions free . . . NOTHING could be farther from the truth . . IF . . you ask how electricity is made ??? IF you understand OHM’s Law . . . IF . . . this whole ‘Carbon Credit’ scam were scientifically based . . . IF this whole ‘Green Agenda’ was anything but wishful thinking . . . Absent any common sense . . .
https://www.academia.edu/73548362/Electric_Cars_Burn_31_More_Energy_than_Gas_Cars_Revised_
just to balance the matter, Drax, at least, is good generation, from a technical point of view, It could provide balancing at the cost of reduced output and earnings, it has inertia and is consistent and reliable. Wind and solar have none of these qualities.
In other words best of bad bunch of renewables, although I do agre that it should not be classed as renewable.
If DRAX burnt just coal, would it be profitable in the current market?
If DRAX burnt just coal, would it be profitable in a market where burning coal does not attract financial penalties?
My limited understanding is that coal-fired generation is penalised under ” The Carbon Price Support “
Given the stupid price leccy now is im sure even with having to pay for the carbon produced by burning coal it would be competitive and given NG has coal on the system most days still its must cost effective.
‘carbon sic produced by burning coal’
Do you mean Co2 by any chance Nicholas?
Biomass at Drax negated all possible UK CO2 emissions savings from Renewables. Here are the sums
https://edmhdotme.wordpress.com/the-inconsistencies-in-green-policies-to-limit-co2-emissions/
None of the figures highlighted in yellow showed £893 million. Can anyone explain where that number came from?
£658m for ROCs and £234m for CfD