Drax contributes more than £1bn to UK GDP, new study finds

UK-based power giant Drax contributed more than £1 billion towards UK GDP in 2015 and supported thousands of jobs across the country, according to a new study from Oxford Economics.

The findings were revealed in a new report looking at the group’s UK operations, which includes Drax Power Station - Europe’s largest decarbonisation project.

Researchers at Oxford Economics studied the impact of Drax Group on the UK’s economy as the company nears completion of a major high tech engineering and infrastructure project to upgrade half the generating units at Drax Power Station near Selby in North Yorkshire to use sustainable biomass in place of coal. With the right support from Government, Drax aims to upgrade the remainder of the Power Station.

Their report estimates that the Group’s UK activities and that of companies in its supply chain last year contributed £1.2 billion to the economy and supported 14,150 jobs.

Employment covered a wide range of sectors including high-skilled manufacturing of industrial components, engineering and technical machinery, construction, IT, professional business services and transport.

This combination of activity and employment also generated tax revenues for the UK estimated at £430 million, equivalent to the salaries of almost 16,500 nurses or 12,900 teachers.

Oxford Economics used three measures to calculate Drax Group’s GDP contribution: the direct activities of the Group and its contractors, activity and employment in the supply chain of the Group and its contractors, and spending by all employees involved.

A breakdown of the GDP generated by Drax Group shows all regions of the UK benefited.

Highlights include:

  • £493 million created in Drax’s heartland of Yorkshire and the Humber.
  • 1,100 jobs for the North East and £82m contributed to the local economy.
  • £191 million generated in the East of England, where the group’s retail arm Haven Power is based.
  • 1,700 jobs supported in Scotland and £120 million generated in its economy.
  • 550 jobs sustained and £42 million contributed to GDP in the South West.
  • The report also analysed the economic impact of upgrading Drax to use compressed wood pellets instead of coal. It reveals this project has thus far generated £710 million in GDP throughout the UK economy, and supported 11,400 jobs, half of these in construction, manufacturing and transport.

Drax Group CEO, Dorothy Thompson, said: “This report shows Drax is supporting more than 14,000 jobs across the UK, with the vast majority resulting from our upgrades to biomass technology.

“The economic benefit has reached all parts of the country. We have been the catalyst for rejuvenation and growth across the Northern Powerhouse with port expansion on the coasts of East Yorkshire, the North West and North East.

“Drax is now the UK’s biggest single generator of renewable power. With the right support from Government we aim to upgrade more of our electricity production to using compressed wood pellets. This would provide a further boost to the UK economy, and deliver increased carbon savings.”

Sam Moore, managing director of consultancy at Oxford Economics, said: “Drax Group makes an important economic contribution to Yorkshire and the Humber, and the UK more widely. Its activities generated over £1 billion in GDP last year, and sustained thousands of jobs across the nation.

“In addition, ambitious investments by the group and its partners in regional biomass infrastructure have driven huge demand, and supported many more thousands of jobs.

“The Drax upgrades to use biomass in place of coal are also environmentally and strategically very significant, in the context of the wider challenges for the UK’s energy system.”

This story was written by Liz Gyekye, editor at Bioenergy Insight. 

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