Drax scraps plans for a dedicated biomass plant

• 12 years ago (2012-02-21)
• Junior Isles

Europe 1089 North America 1021 Renewables 776

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British coal-fired power producer Drax has scrapped its plans to build a dedicated biomass in North Yorkshire, but says it is ready to invest in biomass-fuelled power generation if the appropriate regulatory support is forthcoming.

The power company said state support levels for using only biomass in power generation were still far too low. The high costs of transporting fuel to its inland site also contributed to the decision to abandon one of its biomass projects, it said.

Drax had planned to build a 290 MW dedicated biomass plant, in cooperation with Siemens Project Ventures, on its Selby site where it operates Britain's largest coal-fired power plant.

Drax said it was also considering options for its two other planned biomass plants in different locations in the UK.

"Drax is ready to transform itself into a predominantly renewable generator, but to do so we need appropriate regulatory support, and to that end we look forward to the timely conclusion of the Government's current review," Chief Executive Dorothy Thompson said.

The British government proposed in October last year to increase state support for co-fired biomass, a mix of coal and biomass fuel, but said it would reduce subsidies for standalone biomass plants by 7 per cent from April 2016.

Though the final outcome of the Renewables Obligation Consultation (ROC) is expected soon, Drax said a reduction in state support for dedicated biomass made its investment case ‘highly challenging’.

Thompson said to reporters that Drax could spend as much as £700 million on biomass, subject to appropriate regulatory support.

The company plans to invest £50 million this year to generate 20 per cent of its power from co-firing biomass, up from 12.5 per cent

Drax’s average fuel cost per MWh rose 30 per cent last year to £33.30 as Drax burned 44 per cent more uneconomic biomass in 2011 than the previous year.