Canadian Biomass Magazine

Drax announces financial results for 2021, ‘a transformational year’

March 3, 2022
By Ellen Cools

Staff installing the new signage at the Drax Prince George site in Canada. Photo courtesy Drax.

Drax group has released the financial results for the year ending Dec. 31, 2021.

Will Gardiner, CEO of Drax Group, said:

“2021 was a transformational year for Drax as we became the world’s leading sustainable biomass generation and supply company, whilst continuing to invest in delivering positive outcomes for the climate, nature and people.

Over the past 10 years Drax has invested over £2 billion in renewable energy and has plans to invest a further £3 billion this decade, supporting the global transition to a low-carbon economy. Our investment has reduced our emissions from power generation by over 95 per cent and we are the UK’s largest producer of renewable power by output. We are proud to be one of the lowest carbon intensity power generators in Europe – a significant transformation from being the largest coal power station in Western Europe.


We have significantly advanced our plans for bioenergy with carbon capture and storage (BECCS) in the UK and globally. By 2030 we aim to deliver 12 million tonnes of negative emissions and lead the world in providing a critical technology which scientists agree is key to delivering the global transition to net zero.”

Financial highlights

  • Adjusted EBITDA £398 million (2020: £412 million)
  • Strong liquidity and balance sheet – £549 million of cash and committed facilities at 31 December 2021
    • Expect to be below two-times net debt to Adjusted EBITDA by the end of 2022
  • Total dividend – 10 per cent increase to 18.8 pence per share (2020: 17.1 pence per share)
    • Proposed final dividend of 11.3 pence per share (2020: 10.3 pence per share)

Strategic highlights

  • Acquisition of Pinnacle Renewable Energy Inc. for C$385 million (£222 million) (enterprise value of C$796 million)
  • Sale of Combined Cycle Gas Turbine (CCGT) generation assets for £186 million
  • Development of the world’s leading sustainable biomass generation and supply company
    • Supply – 17 pellet plants and developments across three major fibre baskets, production capacity of c.5Mt pa
    • 22Mt (c.$4.5 billion) of long-term contracted sales to high-quality customers in Asia and Europe
    • 14Mt of own-use sales through 2026
    • Generation – 2.6GW of biomass generation – UK’s largest source of renewable power by output
  • Development of BECCS in UK
    • East Coast Cluster – selected as one of two priority carbon capture and storage clusters
    • Government – BECCS included in Net Zero Strategy and Interim Bioenergy Strategy
    • Drax Power Station – planning application started, technology partner selected and FEED study commenced

Strategic outlook – growth plans aligned with global low-carbon growth

  • To be a global leader in sustainable biomass
    • Targeting eight Mt pa of production capacity and four Mt pa of biomass sales to third parties by 2030
  • To be a global leader in negative emissions
    • Targeting 12Mt pa of negative CO2 – UK and international BECCS
  •  To be a UK leader in dispatchable, renewable generation
    • Key system support role for biomass and expansion of Cruachan Pumped Storage Power Station
  • All underpinned by continued focus on safety, sustainability and biomass cost reduction
  • Investments totalling £3bn in period to 2030, fully funded through cash generation
    • Pellet production, UK BECCS and Cruachan expansion

Future positive – people, nature, climate

  • CO2 – >95 per cent reduction in generation emissions since 2012 – sale of CCGT generation assets and end of commercial coal in March 2021 and closure in September 2022 following fulfilment of Capacity Market agreements
  • Sustainable biomass sourcing
    • Science-based sustainability policy compliant with current UK and EU law on sustainable biomass
    • Biomass produced using sawmill and forest residuals, and low-grade roundwood, which often have few alternative markets and would otherwise be landfilled, burned or left to rot, releasing CO2 and other GHGs
    • Significant increase in sawmill residues used by Drax to produce pellets – 57 per cent of total fibre (2020: 21 per cent)
      100 per cent of woody biomass produced by Drax verified against SBP, SFI, FSC(4) or PEFC Chain of Custody certification with third-party supplier compliance primarily via SBP certification
    • Glasgow Declaration launched at COP26 to establish a world-wide industry standard on biomass sustainability
  • People – Diversity, Equity and Inclusion – female representation in the UK business increased to 36 per cent (2020:34 per cent)
  • Governance – two new North America based non-executive directors – Kim Keating and Erika Peterman

Operational review

Pellet production – acquisition of Pinnacle, capacity expansion and biomass cost reduction

  • Adjusted EBITDA (including Pinnacle since 13 April 2021) up 65 per cent to £86 million (2020: £52 million)
    • Pellet production up 107 per cent to 3.1Mt (2020: 1.5Mt), with 1.2Mt sales to third parties and increased own-use
    • Total $/t cost of production down seven per cent to $143/t(5) (2020: $153/t(5))
  • Developments in U.S. southeast (2021-22) – addition of c.0.6Mt of new production capacity
    • Completion of LaSalle and Morehouse plant expansions
    • Commissioning of Demopolis and first satellite plant (Leola)
    • Commencement of construction of second satellite plant (Russellville)
  •  Further opportunities for growth and cost reduction – increased production capacity, sales to third parties, continued operational efficiencies and improvement, wider range of sustainable biomass and technical innovation

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