Drax pumps £431m into regional economy, says new report

Andy Koss

Drax Group contributed more than £1.6 billion towards UK GDP in 2017 and supported thousands of jobs across the country, including a contribution of £431m in the Yorkshire and Humber region, according to a report just out.

The findings were revealed in analysis by Oxford Economics looking at the economic impact of Drax’s UK operations, which includes Selby-based Drax Power Station. The Power Station, which employs around 900 people and has converted four of its six generating units to use compressed wood pellets, generated 15% of the country’s renewable electricity in 2017 – enough for four million households.

Researchers at Oxford Economics used three measures to calculate Drax’s GDP contribution: the economic activity associated with the day-to-day running of the business; the activity created by the purchase of goods and services from its suppliers; and the wages the company’s employees and suppliers’ employees spend in their local area.

In the past year, Drax Power Station’s activities have supported employment in a wide range of sectors including high-skilled manufacturing of industrial components, engineering and technical machinery, construction, IT, professional business services and transport.

Drax Power CEO Andy Koss said: “This new report shows that as well as being of major significance nationally as the country’s biggest renewable power generator, Drax Power Station continues to play a crucial role in supporting the Yorkshire economy.

“Thanks to a sophisticated supply chain that spans both the east and west coasts of the country, Drax supported over 5,700 jobs across the North of England last year, including 3,200 in Yorkshire, and generated £600 million in economic activity. Drax works with hundreds of businesses across the Northern Powerhouse region to ensure millions of UK homes and businesses have the power they need each day.

“The North of England has a rich heritage in providing energy to the rest of the UK. Drax continues to play a vital role in providing the country with flexible, low carbon generation, to support the system as it continues to decarbonise. Our strategy for moving beyond coal is enabling us to preserve the life of the power station, protect jobs and ensure we continue to make an important contribution to the region’s economy.”

The conversion of a fourth generating unit at Drax from coal to biomass helped the UK reach another green milestone this year as the power generating capacity available from renewables surpassed fossil fuels for the first time.

It is also about to start the first bioenergy carbon capture and storage pilot project of its kind in Europe, using technology developed by Leeds University spin-out company C-Capture.  If successful, the technology could enable the power produced at Drax to become carbon negative, meaning it helps reduce the carbon dioxide accumulating in the atmosphere. Negative emissions are vital if we are to meet our future climate targets.

Selby MP Nigel Adams said: “Drax is a key economic asset both in Selby and nationwide. As the country’s single largest generator of renewable electricity, the business is a key part of the local community and supports employment and skills in the region. Drax has a rich history but has been keen to look to the future and further ways in which it can continue to innovate, enriching our community.”

Osman Ismail, Senior Economist at Oxford Economics, added: “Drax Group makes an important economic contribution to Yorkshire and the Humber, and the UK more widely. Its activities generated almost £1.6 billion in GDP last year, and sustained thousands of jobs across the nation.”