The government’s policy on renewable energy has come under fire following Drax’s decision to abandon its plans to build a £1Bn carbon capture and storage facility in North Yorkshire.
Drax has cited the government’s decision in the summer to cut subsidies to the renewable energy sector as one of the reasons for its withdrawal from the project.
Drax board member Peter Emery blamed “critical reversals” in government support has led to a massive hit on profitability. He commented: “We’ve also got concerns about the government’s future support for the low carbon agenda and that’s left us in a position where we are no longer confident we can persuade our shareholders that this is an attractive investment, given the obvious risks.”
Despite a £1Bn incentive being on offer by the government, no carbon capture projects have been built in the UK.
Drax had already invested £3M into developing its carbon capture project. The plant’s other consortium members, Capture Power Ltd, Alstrom and BOC said they were disappointed by Drax’s decision but pledged to push on with the project.
In a statement Drax said the White Rose carbon capture and storage project has the potential to capture up to 90% of carbon emissions from a new coal fired power station next to the company’s existing power plant in Yorkshire, which would then be stored beneath the North Sea.
The company said that it remains fully committed to the completion of the study into the feasibility and development of the project.
Despite not investing any further, Mr Emery confirmed that Drax’s existing infrastructure will remain available for the construction of the project.
Dr Luke Warren, Chief Executive of the Carbon Capture & Storage Association, commenting on the decision said: “While it is disappointing news for Drax that they will not be participating as an investor in White Rose, it is clearly positive that they recognise the value of this exciting project and are fully behind its development at the Drax site.
“It is also encouraging to hear that Capture Power remains committed to the delivery of the project and the UK CCS commercialisation programme. White Rose is key to delivering real benefits to the Yorkshire and Humber region by developing the CO2 infrastructure that provides the foundation for a low-carbon industry in the region.
“The coming months are absolutely critical for CCS in the UK and the Government must successfully deliver two projects from the CCS competition in order to achieve its goals of delivering a cost-competitive CCS industry in the 2020s. Failure to secure this investment will set back CCS by more than a decade with profound implications for the UK’s energy, industrial and climate policies.
“This development is symptomatic of the wider challenges facing the energy market and highlights the importance of Government establishing the regulatory and market framework that can secure the required investment. Government has to come forward and provide clarity on its intention for CCS.”
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