Drax has confirmed it will no longer sell gas to its SME business customers as part of its aims to become a carbon negative generator by 2030.
The group made the announcement in its latest financial results, published this morning (23 February), in which it posted an underlying profit of £731 million, up almost 84% on the £398 million it posted in 2021.
In a statement the company, which supplies gas and electricity through its retail arm Opus Energy, said the decision to exit the gas supply market followed a strategic review.
“Having already ceased acquiring new gas customers, no renewal contracts will be offered after May 2023. We anticipate the portfolio will reduce by over 50% by the end of 2023 and be almost entirely gone by the end of 2024,” it added.
A spokesperson told Utility Week that the announcement to end gas retail was made to customers last month.
As a renewable generator, Drax supplies power via its biomass (BECCS), hydro and pumped storage plants. Despite the company benefitting from soaring wholesale costs in the year since Russia invaded Ukraine, Drax posted a fall in its operating profit, £146 million compared to £197 million in 2021.
Will Gardiner, Drax Group chief executive, said: “Drax delivered a strong performance in 2022, and played a significant role in ensuring security of supply during a challenging year for the UK’s energy system.
“Our renewable generation – biomass, hydro and pumped storage – are a major source of power in the UK and during periods of peak demand when there was low wind and solar power, these assets collectively supplied up to 70% of the UK’s renewable power in certain periods.
“We believe that BECCS can become a world-leading solution for large-scale high-quality carbon removals and we are seeing increasing global policy support for its delivery.”
Gardiner called on the UK government to accelerate its policy support for BECCS in response to the Inflation Reduction Act introduced in the US.
He added: “Drax is a growing international business with strong cash returns which we are reinvesting to produce more renewable energy and deliver carbon removals while reducing our own carbon emissions.
“We aim to be at the heart of the energy transition, creating the jobs, renewable power and large-scale carbon removals that the world needs.”