North Yorkshire-based power company Drax Group said it contributed almost £1.7 billion towards UK GDP in 2016 and supported more than 18,500 jobs across the country.
Drax Group said the findings were revealed in a new report looking at the economic impact of Drax’s UK operations, which includes the massive Drax Power Station that provides power to six million homes.
Researchers at Oxford Economics found that Drax Group’s contribution to the British economy has increased by 34% year-on-year following the group’s acquisition of Opus Energy, a large retail company which supplies energy to businesses.
Based on Drax’s operations in the energy sector and its use of British businesses across its supply chain, the report estimates that the company contributed £1.67 billion to the economy and supported 18,500 jobs last year, a rise from 14,150 in 2015.
The report said 90% of this impact is felt outside London and the South East – of the £1.67 billion Gross Value Added by Drax Group only £155 million was in London.
Researchers at Oxford Economics used three measures to calculate Drax’s GDP contribution: the economic activity associated with the day-to-day running of the business; the activity created by the purchase of goods and services from its suppliers; and the wages the company’s employees and suppliers’ employees spend in their local area.
A breakdown of the GDP generated by Drax Group shows all regions of the UK benefited.
- £419 million created in Drax’s heartland of Yorkshire and the Humber, where its power station is located.
- 760 jobs for the North East and £59 million contributed to the local economy.
- £232 million generated in the East of England, where one of Drax Group’s business retail suppliers, Haven Power, is based.
- 1,600 jobs supported and £130 million generated in Wales, the home of Drax Group’s recently acquired business retail supplier, Opus Energy’s Cardiff offices.
- 900 jobs supported in Scotland and £76 million generated in its economy.
- 950 jobs sustained and £83 million contributed to GDP in the South West.
Drax Group CEO Dorothy Thompson, said: “As a British energy company, we are committed to working with UK businesses right across our supply chain.
“This report shows that Drax now supports more than 18,500 jobs across the UK and with our new business strategy in place, we believe we will boost this number further.
“With the power station’s sophisticated supply chain and our growing retail business, we are making a positive economic contribution in every region of the UK.
“We are an important player in an energy sector that is crucial to delivering a low carbon economy as part of the Government’s wider Clean Growth Strategy for the country.
“Since upgrading half of the power station to use sustainable biomass instead of coal, Drax is the UK’s biggest single site generator of renewable power – producing enough for four million households.
“We are also exploring options for a coal-free future, including the repowering of our remaining coal generating units either to biomass or to gas, with battery storage of up to 200MW.
“If developed these options for gas and battery storage show how we could upgrade our existing infrastructure to provide capacity, stability and essential grid services, as we do with biomass.
“This will allow more renewable energy sources onto the system, paving the way for increased carbon savings across the UK as a whole and helping us to meet the government’s ambitions for a coal-free system by 2025.”