Power station Drax has reported a 15 per cent fall in earnings to £102m in the half year to June 30 as it was hit by increases in carbon taxes.

The tax on fossil fuels rose to £9.55 per tonne on April 1 from £4.94 a year ago.

However, North Yorkshire-based Drax now says more than 20 per cent of its output is powered by biomass fuel, such as woodchips.

The power station provides up to eight per cent of the UK's electricity.

Earlier this month, Drax won its High Court appeal against the Government’s u-turn over funding.

The Department of Energy and Climate Change (DECC) had withdrawn its investment support for Drax’s plans to convert one of its units from coal to sustainable biomass, leading to the Selby company taking legal action in April.

As part of Drax’s ongoing conversion project, the Government offered Drax an investment contract for its third unit conversion, but said its second unit was ineligible for the same contract and instead would only qualify for an old direct subsidy system, said to be less lucrative.

A High Court judge ruled the second unit conversion was “indeed eligible for an investment contract”.

The DECC was granted leave to appeal.