Drax Group has reported a fall in first-half adjusted EBITDA to £279 million, down from £460 million in the same period last year, as the company continues to invest in expanding its generation portfolio beyond biomass.
The group's interim results, covering the six months to 30 June 2026, also showed net debt rising to £1,025 million, up from £784 million at the end of 2025.
Despite the lower earnings, Drax increased its interim dividend to 12.9 pence per share, up from 11.6 pence in H1 2025, and confirmed guidance for a full-year dividend of 32.2 pence, up 11% year-on-year — the tenth consecutive year of dividend growth.
CEO Will Gardiner said the company had delivered a solid first-half performance while helping maintain supply for UK households and businesses through a period of geopolitical uncertainty and difficult weather.
He described the business as being at a pivotal point in its transition, investing to build a larger, more diverse generation portfolio, and pointed to growth plans across batteries, open-cycle gas turbines (OCGTs) and the Selby site as central to that expansion.
Taken together with the proposed acquisition of Bluefield Solar Income Fund and the group's trading and optimisation platform, Gardiner said these moves were expected to increase generation capacity by around 85% compared with 2025.
Performance by business area
Biomass Generation remained the largest contributor to group earnings but saw EBITDA fall to £159 million from £332 million, which Drax attributed primarily to a lower achieved power price compared with the first half of 2025.
Generation volumes were broadly stable at 7.0TWh, with the company noting it had bought back some forward-sold positions to reallocate output to expected higher-value periods later in the year. A major planned outage on one generating unit is under way, with completion expected in August.
Pellet Production EBITDA fell to £64 million from £74 million, with production down to 1.9 million tonnes from 2.1 million tonnes, reflecting the closure of the Williams Lake facility in Canada and production patterns weighted toward the second half of the year. Drax said it continues a strategic review of its Canadian operations.
Pumped Storage and Hydro delivered £47 million in EBITDA, down from £64 million, with strong underlying performance offset by planned and unplanned outages, including a grid connection failure at Cruachan in December 2025 caused by assets owned by Scottish Power Energy Networks; Drax said it is working with SPEN to restore the connection, expected in 2027. A roughly £80 million refurbishment of Cruachan units 3 and 4 is under way, expected to run through 2027 and add 40MW of capacity.
The company's first OCGT unit, at Hirwaun in South Wales, began operating in May 2026 and is performing well, adding around 0.3GW of capacity. Energy Solutions, which provides renewable power supply and route-to-market services, posted EBITDA of £27 million, up from £18 million, while newly acquired flexibility platform Flexitricity — bought for £36 million in March 2026 — is providing route-to-market services for around 0.9GW of assets, primarily battery storage and thermal.
Growth and capital allocation
Capital investment rose to £85 million in the first half, from £59 million a year earlier, with £46 million directed toward growth projects including battery storage, pumped storage and hydro upgrades, and OCGTs. Full-year capital investment is expected to reach £210-250 million, excluding the proposed BSIF acquisition.
Drax confirmed the proposed £561 million acquisition of Bluefield Solar Income Fund, with an enterprise value of around £1,082 million, is progressing after BSIF shareholders voted 99% in favour on 24 July. Subject to remaining conditions and court sanction, the scheme is expected to become effective on 31 July 2026. The deal would add 0.9GW of solar and wind capacity, along with a pipeline of 2.9GW of battery storage and solar projects.
The company said it is targeting adjusted EBITDA of £650-800 million by 2029, driven in part by around 0.7GW of battery storage capacity expected to come online from 2027, and reiterated a target of more than £150 million in annual structural cost savings from 2027 compared with a 2024 base.
Drax also confirmed that the FCA has closed its investigation into historical statements regarding the company's biomass sourcing and the compliance of its 2021-2023 annual reports, with no action taken.
Drax reports lower first-half earnings as it invests beyond biomass
