The company behind the world’s biggest biomass power station has cut pellet production to 1.9 million tonnes, down from 2.1 million a year earlier, as fibre shortages squeeze its Canadian mills and the whole operation there is under strategic review. That is according to Drax Group’s half-year results, released on Thursday, which put earnings at £64 million, down 14 per cent, within a group result that fell 39 per cent to £279 million.
“We are at a key moment in Drax’s transition,” Group Chief Executive Will Gardiner said, presenting a half in which lower achieved power prices cut biomass generation earnings to £159 million from £332 million a year earlier. Generation at the North Yorkshire station still reached 7.0 terawatt hours, output Drax puts at 6 per cent of UK electricity and 10 per cent of the country’s renewables.
Cutting production was partly a closure and partly a choice. The fall to 1.9 million tonnes reflects the loss of the Williams Lake plant in British Columbia, along with a decision to weight output toward the second half of the year in line with expected generation at Drax Power Station.
Canadian mills ran well on the company’s own account and still earned less, with Drax naming a constrained fibre market as the driver of lower margins in a province where the Wood Pellet Association of Canada counts fibre supply down more than 40 per cent since 2018. British Columbia operates at 60 per cent of the sustainable harvest set by its independent Chief Forester, on the association’s numbers, and Williams Lake was one of three major operations the province lost in 2025, alongside the Crofton pulp mill and the West Fraser sawmill at 100 Mile House.
The strategic review of the Canadian business has now been underway since February, when Drax wrote off £337 million from the operation and the paused Longview pellet project, citing lower expected margins, a constrained fibre market, and power station demand already covered by the US mills.
Cheaper production in the US South cut the pellet division’s earnings without costing the group a pound. Lower costs reduced the prices charged to the UK generation business under Drax’s intercompany pricing, and the same savings appeared as lower biomass costs at the power station.
“Accurate reporting is crucial to the integrity of our markets,” the Financial Conduct Authority said in closing its investigation into Drax’s biomass sourcing statements and the compliance of the company’s 2021, 2022, and 2023 annual reports, with no action taken. That probe had opened in August 2025, a year after Ofgem found Drax had misreported profiling data on the forest types and sawlog content of its Canadian wood, findings the company answered with a £25 million payment into a voluntary redress scheme.
It comes as shareholders in Bluefield Solar Income Fund voted 99 per cent in favour of Drax’s £561 million takeover on 24 July, a deal expected to complete on Friday and one Gardiner says will take the group’s generation capacity 85 per cent above 2025 levels. Every tonne the mills produce still has a buyer, with the power station moving onto its new contract for difference from April 2027 and dispatching up to 2.6 gigawatts to match system needs as intermittent renewables grow.
Shipping those pellets got its own decarbonisation clause in April, when Drax signed a transatlantic freight contract requiring the carbon emissions from every shipment bound for the station to fall each year.
