Industry News

Drax Shares Rise Following Government Talks on Biomass Carbon Capture Project

by | Apr 3, 2023

Shares of British power company Drax rose by about 5% on 30 March following its discussions with the UK government over its £2b CCS project alongside its 2.6-gigawatt biomass power plant in Yorkshire in the north of England, reported Reuters

The British government laid out plans on March 30 to boost its energy security and independence through investing in cleaner, more affordable energy sources, including projects to capture and store carbon dioxide (CCS). 

The company had previously announced that it was pausing the project until it received funding clarity from the government. 

“With the right engagement from government and swift decision making, Drax stands ready to progress our 2 billion pounds investment programme,” Will Gardiner, Drax Group CEO, said in a statement.

Shares in the company jumped by over 5% on Thursday, having fallen by 12% earlier when the government said that Drax was not selected for its Track-1 programme, which is part of a 20 billion pound a year funding scheme it announced in March for carbon capture technology. 

A subsidy scheme currently in place for biomass units runs out in 2027, which a Drax spokesperson commented would make such units unviable. 

Biomass units provide about 6% of Britain’s electricity. 

Climate groups have criticised biomass, claiming it is not a carbon-neutral of generating power. 

The Climate change committee in early March called on the government to end subsidies for biomass when they expire in 2027, saying: 

“Bioenergy is too expensive, and even sustainable biomass supplies have significant lifecycle greenhouse gas emissions”, the CCC said in a much broader report about Britain’s energy future.

A Drax spokesperson said its “conversion from coal to biomass is one of the primary reasons that the UK’s power sector has decarbonised as fast as it has over the last decade while maintaining energy security”.

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