Drax profits soar as prices jump

Environmental protestors targeted the Drax power station last month

Rising UK electricity prices have generated bumper profits for Drax Group, the owner of Europe's largest coal-fired power station.

The company reported pre-tax profits of £317m ($593m) for the first half of the year, up from £13m a year ago.

Output from Drax's power plant at Selby in North Yorkshire was higher, and the price received per megawatt hour rose to £45.70 from £30.10 last year.

The power station is capable of meeting about 7% of the UK's energy needs.

UK electricity prices have been rising as a result of higher wholesale gas prices, which have been driven up by worries over supplies and increasing oil prices.

As Drax does not buy wholesale gas it has managed to benefit from rising electricity prices without its own costs increasing.

Drax announced it would pay a special dividend of 80 pence per share, on top of its planned ordinary dividend of 4p.

In 2002, falling wholesale electricity prices pushed Drax into administration. However, after a financial restructuring the company was floated on the stock exchange last year, and in June it joined the FTSE 100 index of top UK firms.

Last month, the power plant was the target of a protest by environmentalists over carbon emissions.