Shares of North Yorkshire-based power company Drax Group rose about 10% on Wednesday after it published a strong trading update and said it aims to double its sustainable biomass production capacity and sales of the product by 2030.
Drax said it expects 2021 adjusted EBITDA to be around the top end of current analyst expectations.
Drax, whose power stations provide around 6% of the UK’s electricity, said it was targeting biomass pellet production of 8 million tonnes per annum (Mtpa) by 2030, compared with current production of 4 Mtpa.
The firm’s strategic capital investment is expected to be around £3 billion between 2022 and 2030, Drax said.
Drax shares have risen about 80% over the past 12 months to Wednesday’s price of £6.05 to give the firm a current stock market value of almost £2.5 billion.
Drax Group CEO Will Gardiner said: “Drax has made excellent progress during 2021 providing a firm foundation for further growth.
“We have advanced our BECCS project — a vital part of the East Coast Cluster that was recently selected to be one of the UK’s two priority CCS projects.
“And we’re now setting out a strategy to take the business forward, enabling Drax to make an even greater contribution to global efforts to reach net zero.
“We believe Drax can deliver growth and become a global leader in sustainable biomass and negative emissions and a UK leader in dispatchable, renewable generation.
“We aim to double our sustainable biomass production capacity by 2030 — creating opportunities to double our sales to Asia and Europe, where demand for biomass is increasing as countries transition away from coal.
“As a global leader in negative emissions, we’re going to scale up our ambitions internationally.
“Drax is now targeting 12 million tonnes of carbon removals each year by 2030 by using bioenergy with carbon capture and storage (BECCS).
“This includes the negative emissions we can deliver at Drax Power Station in the UK and through potential new-build BECCS projects in North America and Europe, supporting a new sector of the economy, which will create jobs, clean growth and exciting export opportunities.”