Electricity generator Drax, parent company of Ipswich-based energy retail business Haven Power, today reported reduced first half profits in line with expectations.

The group, which owns the UK’s largest coal-fired power station at Drax, near Selby, in Yorkshire, reported underlying profits of £120million for the six months to June 30, down 22% from £154m in last year’s first half.

Drax said the decline reflected increased carbon costs, following changes in EU policy and the start of the UK carbon tax, but that it had delivered a good operating performance.

The period included the commissioning of the first of three generating units at Drax which it plans to convert from burning coal to sustainable biomass, in a move which will eventually make it a predominantly biomass-fuelled generator.

Drax said the unit, the largest anywhere in the world to have been converted from coal to biomass, had come on stream in April and was performing according to plan.

Work on commissioning new biomass receipt, storage and distrubition systems will start later this year.

Drax said that Haven Power, which sells energy into the business market, continued to represent a valuable alternative to trading through the wholesale market.

“Sales growth within the industrial and commercial and small and medium enterprise markets remains the business priority,” the group added.

“With significant growth achieved in the first half of the year we are confident in our ability to continuing to grow our power sales to business customers.”