Drax Group has announced a £150 million (€169.4m) share buyback programme and lowered its annual capital expenditure forecast, after it paused further investment in projects to capture and store carbon dioxide in the UK.
The British biomass giant said it plans to return the sum to shareholders in a programme that is due to commence in Q2 '23, and which will be completed by the end of this year.
It added it does not expect the programme to have any impact on its medium- and long-term growth plans, which still includes UK bioenergy with carbon capture and storage (BECCS), US BECCS, pellet plant and pumped storage hydro expansion.
Drax recently announced it had paused its multi-million pound investment into the UK's BECCS project until it receives more clarity surrounding government support.
It therefore expects capital expenditure to be between £520m to £580m (€587.5 to €655.3m). Its prior forecast was between £570m and £630m (€643.9m to €711.7m).
Drax added it expected annual adjusted core profit to be in line with market expectations.
Will Gardiner, Drax Group CEO, said: “In the first quarter of 2023, we have delivered a strong system support and generation performance, providing renewable, secure, dispatchable power for millions of homes and businesses across the UK.
"We remain excited about the opportunity to do BECCS in the UK. Whilst the project is not currently in the Track 1 process, we have commenced formal discussions with the government to facilitate the transition to BECCS at Drax Power Station by 2030.
“At the end of March, we formally closed the remaining two coal units at Drax Power Station. This is a significant moment for the business and I’d like to thank the many hundreds of people involved in making this happen and transforming Drax into a global leader in biomass power generation.
“In the US, we continue to make good progress screening options for over 10 BECCS projects which will deliver long-term, large-scale carbon removal.”
Drax announces £150m share buyback programme in Q1 ’23 results
