A fire at Britain’s largest power plant, owned by Drax, has sent £10 million in earnings up in smoke for the company.

The firm has revealed a small “localised” fire broke out last week at the plant near Selby in North Yorkshire, in an area where highly flammable biomass pellets are offloaded on to a conveyor belt, which meant biomass-fuelled units had to be shut down “for a short time”.

Since the fire, the two units in question have been generating less power – the repair work is expected to continue until January.

A third biomass unit is unaffected, as are three coal-fired units, but Drax warned investors to expect a reduction in its earnings before interest, tax, depreciation, amortisation (EBITDA) of £10 million for 2017 as a result of the problems.

In response to the news, shares took a nosedive by 8.8 per cent in early trading, just one week after Drax reassured the market trading was on track.