Drax to halt CCS investment, seeks support for fourth biomass unit

Drax Power Station out of CCS demo
Drax: Not putting any more money into White Rose CCS

Drax will not invest further into carbon capture and storage (CCS). The company will quit the White Rose project once the front-end engineering and development phase is completed next year.

Drax, however, is seeking government support to convert a fourth coal fired unit to biomass. The 4GW power station is the largest in Britain, and without further conversion to biomass, remains the UK’s single biggest emitter.

The firm said its infrastructure remains available for CCS projects in the future, and the remaining partners in the project BOC and Alstom, say they will carry on. However, some have questioned whether the project, which is vying for some £900m in government funding, can carry on without the principal power plant operator’s continued investment.

CCS involves capturing carbon dioxide – either at power plants or at industrial sites – transporting it by pipeline and storing it underground. It is thought that waste CO2 could be used to extract fossil fuels from depleted offshore wells and then sealed in the wells themselves.

Carbon capture and storage, while as yet unproven, is seen as a key technology if the UK is to decarbonise its own economy without simply exporting heavy industry to other economies.

Drax said government policy changes were behind its decision to use its funds elsewhere. The firm’s value has plunged by 71% in the last 18 months. Enjoying a five year high at the beginning of 2014, the company saw its value fall steeply around the the first capacity auction last December, and again in July, when George Osborne announced changes to the Climate Change Levy.

Drax now seeks a judicial review of the decision to remove the exemption for renewable power from the CCL.

“We are confident the technology we have developed has real potential, but have reluctantly taken a decision not to invest any further in the development of this project.  The decision is based purely on a drastically different financial and regulatory environment and we must put the interests of the business and our shareholders first,” said Drax Group operations director Pete Emery of the decision to quit the White Rose group.

“We will focus our resources on the areas which we can deliver best value, particularly working with Government to explore the potential for converting a fourth generating unit to run on sustainable biomass.

“Drax still believes this project has great potential and we have announced that the site at the Drax Power Plant, along with our existing infrastructure remain available for the project to be built.”

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