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Drax sees earnings at top end; Could start data centre by 2027
(Sharecast News) - Controversial power generator Drax said it expected full year earnings to be at the top end of consensus estimates adding that it could convert existing infrastructure at its North Yorkshire plant to run a data centre as soon as 2027 Drax, which burns wooden pellets at Britain's biggest power plant, expects 2025 adjusted core earnings of £892 - £909 million, with a consensus of £920m.
"Our year to date operational and financial performance has been strong, and we are focused on delivering £3bn of free cash flow between 2025 and 2031, which can support investment in energy security, data centres and flexible, renewable energy underpinning long-term value creation and returns to shareholders," the company said in a trading update on Thursday.
Up to £2bn would be allocated to growth opportunities in flexible and renewable power, energy security and new uses of the Drax site, including data centres.
Drax said it is preparing a planning application for an initial data centre of about 100 megawatts that could be operational as soon as 2027.
The group is continuing to target post 2027 adjusted earnings, before interest, tax, depreciation and amortisation of £600m - £700m million before development expenditure.
Drax recently signed a new subsidy agreement with the UK government which moved to drastically cut the usage of the energy source and the millions in UK taxpayer subsidies to run the plant.
The Guardian newspaper last month reported that Drax had continued to burn 250-year-old trees sourced from some of Canada's oldest forests despite growing scrutiny of its sustainability claims, citing forestry experts.
A report suggested it was "highly likely" that the plant sourced some wood from ecologically valuable forests as recently as this summer.
In response, Drax said at the time: "Our sourcing policy means Drax does not source biomass from designated areas of old growth and only sources woody biomass from well-managed, sustainable forests."
Reporting by Frank Prenesti for Sharecast.com
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