Putting energy tax on renewables is ‘like putting alcohol tax on orange juice’ says Drax boss

Dorothy Thompson, the chief executive of Drax Group which operates the UK’s biggest power station, has spoken of her dismay at recent changes to government policy on renewables.

Drax power plant in England provides around 7 per cent of the UK’s electricity supply and is in the process of converting three of its six coal units to run on biomass – two are complete and the third is due for completion next year. Dorothy Thompson, the chief executive of Drax Group

This work was carried out on the understanding that the biomass units would not be hit by the UK Climate Change Levy, an energy tax designed to be an incentive to cut emissions that did not apply to renewable technologies.

But in August the government changed the rules of the levy to include renewables, a move that Thompson said “was a shock for shareholders and a shocking change of policy”.

She told the Economist Energy Summit in London that putting the Climate Change Levy on renewables “was like putting an alcohol tax on orange juice”, and added that the government’s move had added a bill of £18m a year for Drax.

She said that “biomass is the perfect back-up for the unreliability of wind and solar” and added:  “With biomass we are just at the beginning of the journey. Burning pellets is as competitive as burning coal.”

However she claimed that the UK “is behind the rest of Europe on biomass”.

Related stories: Blow for CCS as Drax pulls plug

Doosan Babcock wins multimillion Drax emissions deal

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...