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Drax keen on gas conversion after posting loss

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Drax is accelerating plans to convert one of its six units to gas in order to bid for a capacity contract as early as 2019. The news comes on the same day the company announced a pre-tax loss of £83m for the first half of 2017.

Results show earnings have increased by 73 per cent , up to £12m from £70m in 2016 and the company’s chief executive is keen to build on that positivity by providing a gas-fired power facility.

Dorothy Thompson (right) said the company had submitted a planning application to convert one of its three remaining coal-fired power units to gas, in the hope of winning a 15-year subsidy contract for providing backup power in winter.

“We are looking at opportunities for a coal-free future,” she told investors on Wednesday, adding that the plan to diversify into gas power was “looking good”.

With Britain heading for total coal phase-out by 2025, Drax had been focused on coal to biomass conversions but now wants one such conversion to be to gas in order to capitalise on the country’s need for a back-up power supply amid the ongoing clean energy transition.

In a setback to its biomass conversion plans, Drax said a unit at which it has been trialling to burn biomass only will be returning to running entirely on coal this winter as it will be producing more reliably.

Thompson added, “Delivering reliable renewable electricity remains at the heart of our business. We continue to produce at record levels, helping to keep the UK’s electricity system secure and supplying our customers through our retail business. With the right conditions, we can do even more. We are progressing our four new rapid response gas power projects and our research and innovation work has identified potentially attractive options to repurpose our remaining coal assets.”

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