Released February 24, 2012 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- The ongoing battle between energy company Drax Group plc (LSE:DRX) (Selby, England) and the U.K. government over subsidies has escalated with Drax scrapping plans for a 299-megawatt (MW) dedicated biomass plant.
The proposed plant was to be located in Selby, North Yorkshire, on the site of the massive 4,000 MW Drax coal-fired plant, the largest in the U.K.. Drax chief executive, Dorothy Thompson, revealed the company's decision during the release of positive preliminary final year results for 2011, and blamed the government's lack of financial support for the technology.
Planning permission for the 299 MW Ouse Renewable Energy Plant was granted to Drax Biomass Ltd by the Department of Energy and Climate Change (DECC) in September 2011. However, even then, Drax threatened that the project would not go ahead unless the government improved the support mechanism for biomass projects. For additional information, see August 15, 2011, article - Green Light for 600 Megawatts of U.K. Biomass Plants.
"We continue to operate at less than our installed renewable biomass capacity because of the current low level of regulatory support," Thompson explained. "However, the results of our biomass combustion trials give us full confidence in our technical capability to become predominantly biomass fuelled."
She added: "In 2011, as part of a review of renewables support, Government announced its intention to incentivise from 2013 the most cost effective renewable technologies, including increased support for electricity fuelled by sustainable biomass in existing coal-fired power stations. With a moderate uplift in the proposed support level we could, over time, maximise the potential for producing this low cost renewable electricity. 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."
Instead, Drax said that it will commit to investing 826 million ($1.1 billion) in co-firing biomass-coal technology if there is a favourable outcome to a planned government review of the subsidy scheme.
This is not the first time Drax and the government have locked horns over the issue of subsidies for biomass. In August 2010, the company delayed plans to build three biomass projects worth more than £2 billion ($3.2 billion), again blaming what it called an uncertain regulatory framework. The projects included the Ouse Renewable Energy Plant, the Heron Renewable Energy Plant at South Killingholme near Immingham in Lincolnshire and another in Kingston-upon-Hull. For additional information see August 8, 2010, article - Drax Delays Three U.K. Biomass Projects.
View Plant Profile - 1073074
View Project Report - 78000482 200005048 78000485
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The proposed plant was to be located in Selby, North Yorkshire, on the site of the massive 4,000 MW Drax coal-fired plant, the largest in the U.K.. Drax chief executive, Dorothy Thompson, revealed the company's decision during the release of positive preliminary final year results for 2011, and blamed the government's lack of financial support for the technology.
Planning permission for the 299 MW Ouse Renewable Energy Plant was granted to Drax Biomass Ltd by the Department of Energy and Climate Change (DECC) in September 2011. However, even then, Drax threatened that the project would not go ahead unless the government improved the support mechanism for biomass projects. For additional information, see August 15, 2011, article - Green Light for 600 Megawatts of U.K. Biomass Plants.
"We continue to operate at less than our installed renewable biomass capacity because of the current low level of regulatory support," Thompson explained. "However, the results of our biomass combustion trials give us full confidence in our technical capability to become predominantly biomass fuelled."
She added: "In 2011, as part of a review of renewables support, Government announced its intention to incentivise from 2013 the most cost effective renewable technologies, including increased support for electricity fuelled by sustainable biomass in existing coal-fired power stations. With a moderate uplift in the proposed support level we could, over time, maximise the potential for producing this low cost renewable electricity. 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."
Instead, Drax said that it will commit to investing 826 million ($1.1 billion) in co-firing biomass-coal technology if there is a favourable outcome to a planned government review of the subsidy scheme.
This is not the first time Drax and the government have locked horns over the issue of subsidies for biomass. In August 2010, the company delayed plans to build three biomass projects worth more than £2 billion ($3.2 billion), again blaming what it called an uncertain regulatory framework. The projects included the Ouse Renewable Energy Plant, the Heron Renewable Energy Plant at South Killingholme near Immingham in Lincolnshire and another in Kingston-upon-Hull. For additional information see August 8, 2010, article - Drax Delays Three U.K. Biomass Projects.
View Plant Profile - 1073074
View Project Report - 78000482 200005048 78000485
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
