Blow for Drax as UK government set to change tune on biomass

The UK government’s proposal to make changes to subsidies has seen a knock-on effect on the owners of the country’s biggest coal-fired power plant.

However Drax has told Power Engineering International that the move will have no impact on the company's exisiting conversions.

FT reports that Drax Group Plc (DRX) plunged to its lowest since September 2012 after the government said it’s considering removing the so-called “grandfathering” of subsidies paid to generators such as Drax that are converting to burn biomass. That means the premium payments they receive for their electricity won’t be guaranteed for the lifetime of the project.
It is the latest blow to the company, after one of its units was excluded from the subsidy scheme after the Court of Appeal reversed a High Court decision in August.

Drax spokesperson, Melanie Wedgbury told Power Engineering International, "Today’s announcement that Government is consulting on changes to the grandfathering policy for future biomass co-firing conversion projects under the Renewables Obligation (RO) will have no impact on the Drax base strategy of converting three generating units to burn sustainable biomass in place of coal and becoming a predominantly biomass-fuelled power generator."

"We have said that we are evaluating the option for a fourth unit conversion and we must now consider the implications of a change in grandfathering policy on that decision. To be clear on today’s announcement, it is about grandfathering policy for future unit conversions, it is not a proposal to close the RO to biomass co-firing or conversion."  

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