Power company Drax says it has shelved its £2bn plans for three major biomass power stations because of the government’s plan to review subsidies in 2013.
Speaking in the company’s first half financial report, Drax chief executive Dorothy Thompson said it was not possible to move forward on the plants in the absence of clarity over what the subsidy (Renewables Obligation Certificate (ROC) banding) would be in 2013.
“As it takes over three years to build a 290MW dedicated biomass-fired generation plant, we expect all of the new plants which we plan to develop with Siemens to be accredited after April 1, 2013,” she said.
She said the ROC banding rates may be different from current rates after 2013, so it was not possible to prove the investment case for the project.
Drax was originally targeting the end of 2010 to prove the investment case for its first plant.
The company is optimising the amount of biomass it is co-firing at the Drax Power Station. Its biomass facility is currently underutilised, as the economics favour burning coal and paying the price of CO2 emissions allowances.
However, Drax said biomass remained central to its business philosophy.
