1、JULY 2023THE ECONOMIC IMPACT OF DRAX POWER STATION IN THE UKiiThe economic impact of Drax Power Station in the UK735 million Total contribution to UK GDP154 million Total UK tax contribution7,130 Total UK jobs supportedDirectIndirectInduced349 million51 million1,074 jobs199 million49 million3,440 jo

2、bs187 million53 million2,620 jobsNORTH OF ENGLAND*412 million GDP412 million GDP278 million GDP3,550 JOBS3,550 JOBS1,190 JOBSYORKSHIRE&THE HUMBERSELBY&AINSTYTHE ECONOMIC IMPACT OF DRAX POWER STATION IN THE UK*North of England comprises the Yorkshire and The Humber,North West,and North East regions.2

3、61mn67mn83mn261mn35mn62mn261mn1.1mn16.2mn9041,2901,3609041,2901,36090120 27011%of total UK renewable power is generated by Drax.6%of total UK electricity is generated by Drax.4The economic impact of Drax Power Station in the UKEXECUTIVE SUMMARYDrax Power Station plays a key role in the British energ

4、y market.Located in Selby,North Yorkshire,it provides 6%of the UKs electricity and is responsible for 11%of the countrys renewable power.This impact assessment,commissioned by Drax Group,evaluates the total contribution of Drax Power Station to the UK economy,the UKs 12 constituent nations and regio

5、ns,and Selby and Ainsty parliamentary constituency.The assessment considers Drax Power Stations own operations,the economic activity supported by its procurement spending,and its payments to employees.1 These impacts are quantified through three key metrics:contribution to gross domestic product(GDP

6、),jobs sustained,and tax revenues stimulated.Drax Power Station has a significant economic footprint across the UK economy.Drax Power Station supports a sizeable contribution to UK GDP.We estimate Drax Power Station supported a total contribution to UK GDP of 735 million in 2021.Nearly half of this

7、total,349 million,was generated by Drax Power Station itselfits direct impact.A further 199 million contribution to UK GDP was supported by its sizeable spending with suppliersits indirect impact.The remaining 187 million contribution to UK GDP was supported by the payment of wages associated with o

8、perating Drax Power Station,and the firms in its supply chainits induced impact.Across the UK,Drax Power Station sustained an estimated total of 7,130 jobs.On top of Drax Power Stations own 1,074 employees,its procurement spending supported a further 3,440jobs along its UK supply chain.The wage-indu

9、ced spending attributable to Drax Power Station sustained the remaining 2,620 UK jobs.1 For this assessment,the activities of Drax Power Station are defined as those undertaken by Drax Power Limited and Drax Corporate Limited.6%of the UKs electricity is provided by Drax Power Station.735 millionDrax

10、 Power Stations total contribution to UK GDP in 2021,along with 7,130jobssupported.5The economic impact of Drax Power Station in the UKThe activity and employment supported by Drax Power Station stimulated significant tax revenues for the UK Exchequer.Drax Power Station raised an estimated 154 milli

11、on in tax revenues in 2021,comprising the tax paid by Drax Power Station and its employees(51 million),along with those stimulated along its supply chain(49 million)and by the wage induced spending it sustains(53 million).The economic activity supported by Drax Power Station is spread across the UK

12、but greatest in the Yorkshire and The Humber region.Drax Power Station supported a total contribution to GDP of 358 million in the Yorkshire and The Humber region in 2021.This primarily comprised Drax Power Stations direct contribution to GDP of 261 million.But through its procurement spending,it su

13、pported a further 35 million contribution to GDP in the region,along with a 62 million contribution to GDP sustained through the wage-financed spending of the Drax Power Station employees.A total of 2,580 jobs were supported by Drax Power Station in the Yorkshire and The Humber region in 2021.As wel

14、l as the 904 direct employees working in the region,Drax Power Stations procurement spending supported a further 640 jobs,with the remaining 1,040 jobs supported by wage-financed spending in the regions consumer economy which is attribute to the power station.Drax Power Station supports economic act

15、ivity in the Selby and Ainsty parliamentary constituency.In Selby and Ainsty,Drax Power Station supported a 278 million contribution to GDP in 2021.This was equivalent to 12%of Selby and Ainstys total economy in that year,and comprised mostly the activities of the power station itself,supporting a 2

16、61 million direct contribution to GDP.It is also estimated to have supported a total of 1,190 jobs in Selby and Ainstyequivalent to one in every 40 jobs located in the area.358 millionDrax Power Stations total contribution to GDP in Yorkshire and The Humber in 2021,along with 2,580 jobs supported.27

17、8 millionDrax Power Stations total contribution to GDP in Selby and Ainsty in 2021,along with1,190jobssupported.6The economic impact of Drax Power Station in the UK7The economic impact of Drax Power Station in the UK8The economic impact of Drax Power Station in the UKTHE ECONOMIC IMPACT OF DRAX POWE

18、R STATION IN THE UK1.THE IMPACT OF DRAX POWER STATION ON THE UK ECONOMY2 This number is taken as the average headcount of Drax Employees throughout the year 2021.Drax Power Station supports a significant contribution to the UK economy.Through its own operations,it directly contributed 349 million to

19、 UK GDP.This direct contribution to GDP is calculated using the so-called income approach to national accounting as the sum of the gross profits earned by Drax Power Station and the employee compensation it paid.But beyond its own operations,Drax Power Station also has a sizeable supply chain,spendi

20、ng more than 200 million with UK suppliers.Its purchases of goods and services from other UK businesses stimulates further economic activity across the economy.In 2021,we estimate Drax Power Stations procurement spending supported a further 199 million to UK GDP,known as its indirect impact.In addit

21、ion,the wage-financed spending of those employed by Drax Power Station,as well as those employed along its supply chain,stimulated further activity in the consumer economy.We estimate this wage-financed spending attributable to Drax Power Station supported an additional 187 million contribution to U

22、K GDP,known as its induced impact.Drax Power Stations total economic footprint in the UK is the sum of the aforementioned direct,indirect,and induced impacts.By combining these channels of impact,we estimate that Drax Power Station supported a 735 million contribution to UK GDP in 2021.Drax Power St

23、ation supports employment across the country.Some 1,074 people were directly employed by Drax Power Station.Most of these jobs(901 employees)were located in Selby at the power station itself,with some other roles supporting the operation of Drax Power Station from London(93 employees)and elsewhere.2

24、 Fig.1:Drax Power Stations total economic footprint in the UK,2021735 millionDrax Power Stations total contribution to UK GDP in 2021.Source:Oxford Economics00 millionJobsDirectIndirectInducedFigures may not sum due to rounding3491991877351,0743,4402,6207,1301,0002,0003,0004,0005,0006,0007,0008,000G

25、VA(left-hand axis)Employment(right-hand axis)1002003004005006007008009The economic impact of Drax Power Station in the UKIts spending with suppliers supported a further 3,440 jobs along its UK supply chain,with another 2,620 jobs sustained in the consumer economy by the wage-induced spending it supp

26、orts.We therefore estimate Drax Power Station supported a total of 7,130 jobs in the UK in 2021.Drax Power Station also stimulated a contribution of tax revenues to the UK Exchequer.Drax Power Station and its employees paid 51 million in taxes to the UK authorities in 2021,comprising 23 million in c

27、orporation tax and an estimated 29 million in labour taxes.Through its procurement spending,Drax Power Station stimulated a further 49 million in tax payments along its UK supply chainthe majority of which was labour taxes(36 million).Lastly,the wage-induced spending attributable to Drax Power Stati

28、on sustained an additional 53 million in taxes revenues.This sums to an estimated total of 154 million in tax revenues paid to the UK Exchequer in 2021,attributable to Drax Power Station.2.THE IMPACT OF DRAX POWER STATION ACROSS THE UKSREGIONSThe impact of Drax Power Station is realised across the U

29、Ks constituent nations and regions.The power station supported its largest economic footprint in the Yorkshire and The Humber region where it is located.But owing to its procurement spending with suppliers across the UK,and the spending of its employees and those employed in its supply chain in the

30、UKs consumer economy,the economic impact of Drax Power Station also reverberates across the rest of the UKs nations and regions.The majority of Drax Power Stations direct contribution to GDP was generated at its site in the Yorkshire and The Humber,at 261 million.Its remaining contribution to GDP wa

31、s spread among the small number of other sites in other regions where support functions are located.Drax Power Stations 214 million procurement spending in 2021 is spread across all 12 nations and regions of the UK.Drax Power Station spent the most with suppliers in the South East region(23%of the t

32、otal),followed by the Yorkshire and The Humber(19%of the total)with suppliers local to the site.Through this spending,Drax Power Station generated a 41 million indirect contribution to GDP in the South East,and a 35 million contribution to GDP in the Yorkshire and The Humber.Drax Power Station also

33、had a notable impact in London,where its spend(also 19%of the total),mostly in the financial services sector,generated a 36 million indirect contribution to regional GDP.With the largest share of its employees residing in Yorkshire and The Humber,Drax Power Station supported a significant contributi

34、on to GDP through the spending it supports in the regions consumer economy through the wages it pays.This spending supported a further 62 million contribution to GDP in Yorkshire and The Humber in 2021.A further 24 million was contributed to GDP in London,as well as 23 million in the South East,whic

35、h is more reflective of the wage-induced spending supported along Drax Power Stations supply chain.7,130 jobsThe total number of UK jobs supported by Drax Power Station in 2021.10The economic impact of Drax Power Station in the UK Overall,Drax Power Stations greatest economic footprint was in Yorksh

36、ire and The Humber,where it made a total contribution of 358 million in 2021.This primarily comprised Drax Power Stations direct contribution to GDP,sustained at the site itself(73%of this total),but supported by its indirect,supply chain impact(10%),and the impact of wage-induced spending in the re

37、gions consumer economy,which accounted for the remaining 17%.Of the 1,074 people directly employed to operate and support Drax Power Station in 2021,the vast majority(904 workers)were based in the Yorkshire and The Humber region.There were a number of other roles across the UK supporting its operati

38、on,with a further 158 roles based across the rest of England,including 93 in London and 34 in the East Midlands,10 jobs in Scotland,and two in Wales.In 2021,an estimated 3,440 jobs were sustained along Drax Power Stations supply chain in the UK.Reflecting the pattern of its spending,690 jobs were in

39、directly supported in the South East,and 640 jobs in Yorkshire and The Humber.An additional 430 jobs were supported in London,and 390 jobs in the North East.Wage-financed spending in the consumer economy supported an additional 1,040 jobs in Yorkshire and The Humber in 2021.This was followed by the

40、South East,where 300 wage-induced jobs were supported,London(200 jobs),and the North East(180 jobs).Drax Power Station supported 2,580 jobs in the Yorkshire and The Humber in 2021.These jobs were distributed between Drax Power Stations own employees(35%of the total),the jobs supported along Drax Pow

41、er Stations supply chain in the region(25%of the total),and jobs supported in the consumer economy by wage-funded spending attributable to Drax Power Station(the remaining 40%).Drax Power Station also supported a total of 1,000 jobs in the South East,720 jobs in London,and 570 jobs in the North East

42、.Fig.2:Drax Power Stations total economic footprint in Yorkshire and The Humber,20212,580 jobsThe number of jobs supported by Drax Power Station in Yorkshire and The Humber in 2021.358 millionTotal contribution of Drax Power Station to Yorkshire and The Humbers GDP in 2021.Source:Oxford Economics00

43、millionJobsDirectIndirectInducedFigures may not sum due to rounding3582,5805001,0001,5002,0002,5003,000GVA(left-hand axis)Employment(right-hand axis)5010015020025030035040026135629046401,04011The economic impact of Drax Power Station in the UK3.THE IMPACT OF DRAX POWER STATION IN SELBY AND AINSTY 3

44、Estimates for the number of jobs supported are rounded to the nearest five.Constituency totals may not sum due to rounding.Drax Power Station is located in the Selby and Ainsty parliamentary constituency,and plays an important role in this local economy.In 2021,Drax Power Station contributed a total

45、 of 278 million to GDP in Selby and Ainsty(Fig.3).This was equivalent to 12%of Selby and Ainstys total economy in that year.It is also estimated to have supported a total of 1,190 jobs in the constituency(Fig.4),which is equivalent to one in every 40 of all the jobs there.The activities of the power

46、 station itself supported a 261 million contribution to GDP,with 901 direct workers based at the site.The constituency received 0.6%of Drax Power Stations procurement spending,which supported a 1.1million indirect contribution to GDP and 20 indirect jobs with suppliers.But a significant 21%of its co

47、mpensation of employees was paid to workers residing in the constituency.3 The wage-induced spending of these employees in the constituency is estimated to have supported an additional 16.2 million contribution to GDP,and a further 270 jobs in the consumer economy,in 2021.The induced impact being gr

48、eat in the locality is reflective of the Drax Power Station workers livingand therefore spending their wagesclose to their workplace,while procurement spending is more distributed across the region and nation more broadly.Fig.3:Drax Power Stations total contribution to GDP in Selby and Ainsty,202127

49、8 millionTotal contribution of Drax Power Station to GDP in Selby and Ainsty in 2021,along with 1,190 jobs supported.Source:Oxford Economics278 millionTotal GDP1,190Total jobsDirectIndirectInduced16.2 million1.1 million261 million9012702012The economic impact of Drax Power Station in the UK13The eco

50、nomic impact of Drax Power Station in the UK14The economic impact of Drax Power Station in the UKMETHODOLOGYTo estimate the direct economic impact of Drax Power Station,Oxford Economics utilised the information provided by Drax in 2021 that was used in its previous economic impact report on Drax Gro

51、ups operations in the UK,U.S.,and Canada.This data included detailed information on employment,spending,and costs incurred through the activities of Drax Power Station,as well as its sources of income and cash flows.We used its gross profits(measured as EBITDA)and compensation of employees to measur

52、e the gross value added contribution of Drax Power Station to gross domestic product(GDP).In this case,the activities of Drax Power Station are defined as those undertaken by Drax Power Limited and Drax Corporate Limited.Oxford Economics put together a detailed model of the UK economy,initially comp

53、rising 105 industries in each of the 12 standard statistical regions.The 105 industries are those found in the most detailed version of the ONS set of UK input-output(I-O)tables.A domestic input-output table gives a snapshot of an economy at a given point in time.The model shows the major spending f

54、lows from“final demand”(i.e.,consumer spending,government spending,investment,and exports to the rest of the world);intermediate spending patterns(i.e.,what each sector buys from every other sectorthe supply chain in other words);how much of that spending stays within the domestic/provincial economy

55、;and the distribution of income between employment income and other income(mainly profits).In essence,an input-output table shows who buys what from whom in theeconomy.To estimate Drax Power Stations indirect impact in the UKs constituent nations and regions,we fed in the companys data on the amount

56、 spent and type of goods and services purchased from its suppliers.To capture any“feedback effects”arising from any of Drax Power Stations international procurement,we used Oxford Economics Global Sustainability Model to model trade flows across industries and how this feeds back to industries in th

57、e UK further along the supply chain.In order to calculate the induced impact,we input the information on compensation it pays to workers,as provided by Drax,which is distributed throughout the consumer economy using the I-O tables.Constituency results are derived from a model built by Oxford Economi

58、cs using information from the ONS Business Register and Employment Survey(BRES)to map the location share of industry and region for each Parliamentary Constituency.We input information on Drax Power Stations procurement spending and wage payments(for employees home postcodes to reflect where the wag

59、es will be spent)to measure the indirect and induced impacts at this local level.15The economic impact of Drax Power Station in the UKOXFORD ECONOMICSOxford Economics was founded in 1981 as a commercial venture with Oxford Universitys business college to provide economic forecasting and modelling to

60、U.K.companies and financial institutions expanding abroad.Since then,we have become one of the worlds foremost independent global advisory firms,providing reports,forecasts and analytical tools on more than 200 countries,100industries,and 7,000 cities and regions.Our best-in-class global economic an

61、d industry models and analytical tools give us an unparalleled ability to forecast external market trends andassess their economic,social and business impact.Headquartered in Oxford,England,with regional centres in New York,London,Frankfurt,and Singapore,OxfordEconomics has offices across the globe

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63、 and thought leadership specialists.Our global team is highly skilled in a full range of research techniques and thought leadership capabilities from econometric modelling,scenario framing,and economic impact analysis to market surveys,case studies,expert panels,and web analytics.Oxford Economics is

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65、es,consultancies,and think tanks.July 2023All data shown in tables and charts are Oxford Economics own data,except where otherwise stated and cited in footnotes,and are copyright Oxford Economics Ltd.This report is confidential to Drax Group plc and may not be published or distributed without their

66、prior written permission.The modelling and results presented here are based on information provided by third parties,upon which Oxford Economics has relied in producing its report and forecasts in good faith.Any subsequent revision or update of those data will affect the assessments and projections

67、shown.To discuss the report further please contact:James Bedford Stephen Foreman Oxford Economics 4 Millbank,London SW1P 3JA,U.K.Tel:+44 203 910 8061Global headquartersOxford Economics Ltd Abbey House 121 St Aldates Oxford,OX1 1HBUKTel:+44(0)1865 268900London4 MillbankLondon,SW1P 3JA UKTel:+44(0)203

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