Tag: investors

How a new industrial revolution in green energy is transforming the North once again

The North of England has long been a proving ground for the kind of engineering innovations that have transformed the world. The heartland of the First Industrial Revolution, it is now at the centre of a new revolution focused on clean energy production and sustainable power, led by organisations like Drax.

Europe’s largest decarbonisation project

Over the last decade, Drax has been carrying out a major high-tech engineering and infrastructure project to upgrade half its generating units to use sustainable biomass in place of coal.

These converted units now produce enough electricity to power Birmingham, Leeds, Sheffield, Liverpool, Manchester and Newcastle – all using compressed wood pellets, cutting carbon emissions by more than 80%.

But more than just having environmental benefits, it’s provided a huge boost to the economy.

Boosting the UK economy

In 2015, Drax contributed more than £1 billion to the UK’s GDP and supported some 14,000 jobs across the country.

“The economic benefit has reached all parts of the country,” says CEO Dorothy Thompson. “We’ve been the catalyst for rejuvenation and growth across the Northern Powerhouse, with port expansion on the coasts of East Yorkshire, the North West and North East.”

This boost was particularly significant in the North, where Drax generated over £620 million for the local economy.

Innovation driving a better future for Britain

It’s these kinds of innovative upgrades that are helping to tackle the urgent environmental challenges that our society faces as we make the transition to lower carbon and renewable power, and changing the way we think about producing energy in the UK.

Having nurtured the Industrial Revolution, today the North of England is again the focus of a major paradigm shift. Where once coal fields and smoke stacks dominated the local landscape, now Drax’s giant biomass storage domes speak of a new future for the region, for the UK, and for renewable energy production as a whole.

To find out more about how Drax has benefited the UK’s economy, please visit https://www.draximpact.co.uk/

Forbes: Drax joint-second most trustworthy company in Europe

I’m delighted that Drax Group plc has been named by Forbes magazine and MSCI ESG Research as one of the 50 most trustworthy companies in Europe.

In fact, Drax came joint second across the whole continent among companies judged who ‘consistently demonstrated transparent accounting practices and solid corporate governance’.

It’s a massive tribute to everyone involved with Drax that world-leading business experts have recognised our commitment to trust and integrity in this way.

Of course, that commitment goes much further than our accounting practices alone. (I believe my British colleagues would say that it runs right through Drax like the writing in a stick of rock.)

Indeed, it was one of the reasons I was so honoured to be asked to join Drax as CFO. From my very first meeting with CEO Dorothy Thompson, I could see that Drax would always strive do the right thing, in the right way.

That’s just as true for our sustainability data as it is for our business data.

It was our commitment to doing the right thing that led Drax to take on the decision to convert Drax power station from coal to compressed wood pellets.

It is our commitment to doing the right thing that means Drax is reducing emissions by over 80 per cent while giving people and businesses all over the UK the reliable, renewable power that they need.

And we know we can save bill-payers money at the same time.

The UK is lagging far behind the rest of Europe when it comes to generating energy from compressed wood pellets. Drax is committed to bringing us closer to the European average, while helping us move from the fossil fuels of the past to the renewables of the future. And yes, you can trust us on that.

We can make a difference in 2016 and beyond

Today we released our financial results for 2015.  I’ll be the first to admit that they are not good.  What makes it all the more painful is that one of the strongest operational performances the business has achieved in the last decade, was more than wiped out by factors well outside of our control.

Let’s be frank, for any business operating in the UK energy market 2015 was a tough year. The deterioration in the commodity markets were some of the most severe I have seen in my career. This was then accompanied by a series of unexpected regulatory announcements which caused many to question the UK governments commitment to decarbonisation.

Like any CEO on results day I have spent this morning speaking to investors, journalists and financial analysts. Instead of focusing too much on what hasn’t gone our way in 2015, I’ve focused on where I think we can make a difference in 2016 and beyond, and I’ve been pleased with their positive reaction.

The affordable way to end coal

In November Amber Rudd announced the government’s proposal to consult on setting a clear end date for coal of March 2025. Given it still provides around 25% of the country’s electricity this is an ambitious target. Part of the solution is new nuclear and gas. But as a recent report by the Institute of Mechanical Engineers noted, the country will find it very hard to build enough new facilities to replace coal capacity in time.

Instead of having to take all the existing coal power stations off the grid and build new facilities, the country could use the world leading biomass technology that Drax has pioneered to upgrade some of them to use compressed wood pellets instead of coal. The economic consultancy NERA found that more biomass conversions are one of the most sensible ways for the UK to get off coal at the fairest price to the taxpayer. With the right support we stand ready to convert our remaining coal units to become a fully renewable generator.

Helping society and creating shareholder value

I fundamentally believe that Drax is making a valuable contribution in helping society deal with one of the most pressing issues of our time – cutting carbon emissions to limit climate change. We have an approach which is both affordable and reliable. So long as we remain operationally strong, which I am very confident about, then shareholder value will accrue.

Throughout 2016 and beyond, we will build on our expertise and continue to evaluate a range of longer term strategic options. I lead a strong business that will use the opportunities available to us to create value for our shareholders and help bring about a reliable, renewable future that we can all afford.

Three ways to judge a CFO

It’s a good question, because you can’t build a great company without a great chief financial officer (CFO). But as a shareholder, how can you judge how well your CFO is doing? Without setting myself up for a fall, the answer I gave our investor broke down into these three questions:

  1. Are they keeping control? At its heart, the first part of any CFO’s role is to make sure that their business is under control and that all risks are being properly managed. They need to maintain a strong balance sheet and keep reporting and communications clear and transparent. Above all, they need to make sure there are no surprises.
  2. Are they improving efficiency? The second part is making sure the organisation is always working as efficiently as possible, keeping a strong hand on costs and ensuring that current revenue streams are always optimised. Above all, they need to be making sure that less money is going out and more money is coming into the organisation.
  3. Are they allocating capital wisely? The final task of any CFO is investing shareholder’s money in the best projects – first internally and second externally. Above all, they need to have a clear consideration of cash returns for shareholders.

So now the next time you wonder how well your CFO is doing, you know how to judge them.

This article was originally published by Will on LinkedIn.