Drax positive about full year prospects

The company also said that it welcomed the recognition of the strategically important role that sustainably-sourced biomass electricity can play in the future UK renewable energy mix.

However, it restated its disappointment with the level of Government support for new biomass power stations, which burn organic produce to create electricity.

It has been planning new biomass power stations at Selby and Killingholme, but said the “investment case” for its £2bn plan would now be “highly challenging”.

In an interim management statement for the period from July 1 2011, Drax, which is based near Selby, said: “Since publishing our half year results on August 2, trading conditions in the commodity markets in which we operate have been relatively stable, and we have taken advantage of some better dark green spreads during the period to strengthen our contracted position.

“We have also benefited from continued good operating performance. The plant’s reliability and flexibility allow us to participate in the real-time electricity trading market, managed on a daily basis by National Grid through the balancing mechanism, and we have been particularly active in this market during the period.

“As a result, we now anticipate that full year EBITDA (and underlying earnings per share (or 2011 will be towards the top of the range of market forecasts.”