The government has ordered sweeping measures to slow the spread of the new coronavirus, shutting down much of the economy and raising the prospect of mass job losses.
"In the customers business, the consequences of (the coronavirus) are only now starting to become visible. It is expected to result in reduced demand and a potential increase in bad debt," Drax said in a statement.
Drax said its customers business, which sells power, gas and energy services to small to medium-sized (SME) companies, is expected to record a full-year adjusted core loss.
Drax has converted four of its six coal power units to using biomass, with the remaining units set to close in 2021.
Power prices have plummeted amid weak demand but Drax said its generation revenues were somewhat protected by strong forward sales and government renewable support schemes.
The company had planned a 230-250 million pound capital investment in its biomass operations for 2020 but said this would be under review and any short-term investment made is likely to be lower.
Drax expects 2020 core profit to be in line with market expectations, despite the hit from the pandemic, and still expects to pay a dividend for 2019 of 9.5 pence a share.
By Susanna Twidale