Drax agrees to extend life of coal-fired power units over winter

Drax has agreed to extend the life of its coal-fired electricity generation units through this winter as the government scrambles to shore up Britain’s energy supplies.

The business secretary, Kwasi Kwarteng, said the operator of the Yorkshire power station had agreed to push its planned closure back by six months until March.

The plant had been due to close its coal operations in late September as Drax attempts to reduce the carbon in its operations. The company has switched most of its operations towards biomass but it has two remaining coal units.

Kwarteng has embarked on a push to secure electricity supplies for the winter after Russia’s invasion of Ukraine upended already squeezed energy markets.

Drax said the units “will not generate commercially for the duration of the agreement and only operate if and when instructed to do so by National Grid”.

Under the terms of the agreement, Drax will be paid a fee and compensated for costs. The company said its profits were now likely to be “slightly above the top of the range of analyst expectations”. Analysts had pencilled in profits of £584m to £635m.

Kwarteng said on Wednesday: “With Russia cutting off gas to parts of Europe, this is a sensible precaution back home. As energy secretary I have a responsibility to ensure we have enough supply this winter.”

The agreement, negotiated between National Grid and Drax, follows a similar move at EDF’s West Burton A plant at in Nottinghamshire. That plant will also stay in operation for a further six months.

Talks over the future of a third coal-fired power station run by Uniper, which is facing financial strife in Germany, are expected to conclude in the next few weeks, sources close to the situation said.

Kwarteng said: “We now have two coal plants available this winter. Negotiations ongoing with one more.”

The government is also in discussions with the British Gas owner, Centrica, to reopen its Rough gas storage site in the North Sea, which was closed in 2017.

The energy security bill, which aims to boost the production of domestic energy supplies, reached parliament on Wednesday.

In the longer term, ministers hope to boost Britain’s capacity to produce energy from a string of sources including new nuclear power stations and windfarms.

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