Drax warning on renewables funding
POWER generator Drax has warned the Government’s subsidies for renewable energy will make it difficult to progress plans to build two new power stations.
Drax welcomed the Government’s proposals on support for co-firing biomass with coal but expressed disappointment at the funding planned for dedicated biomass plants.
The operator of the Drax power station has secured planning permission for two biomass-fuelled power stations in a joint venture with Siemens but the company has always insisted Government subsidies will have to be set at the right level to make the proposals viable.
It already burns biomass alongside coal at its existing facility and wants to raise the proportion of renewable fuel burned there from 12.5% to 50%.
The Government delivers support to renewable energy providers through a system known as Renewable Obligation Certificates and yesterday set out how many ROCs generators will receive in the future for different types of energy.
Drax chief executive Dorothy Thompson said: “We appreciate the extensive work undertaken by the Government on biomass options and we welcome the recognition of the strategically important role that sustainably-sourced biomass electricity can play in the future UK renewable energy mix.
“We are pleased that the Government, in seeking to maximise the deployment of the cheapest renewable technologies, has created specific support levels for the increased use of sustainable biomass in existing coal-fired power stations through enhanced co-firing and full conversion.
“The proposed level of 1.0 ROC/MWh for enhanced co-firing will enable us to increase our cofiring, but we would need a moderate uplift to maximise our potential for producing this low cost renewable electricity.”
The dedicated biomass power stations would be built alongside the existing Drax facility and at a site at Immingham and would produce enough electricity for 500,000 homes.
Mrs Thompson said: “We are disappointed with the proposed level of support for this technology, which makes the investment case for the developments highly challenging.
“We note that this is the start of a consultation period and we will play our full part in the consultation process.”
The Government believes its subsidy plans will help deliver 70% of the renewable energy needed to meet 2020 targets on climate change.
Deputy Prime Minister Nick Clegg said: “Investing in green energy boosts growth and creates jobs – the offshore wind sector alone could provide up to 66,000 jobs in this country by 2020.
“Supporting clean, green, secure energy is the right thing to do for both the environment and the economy.
“Today’s announcement makes clear the Government’s commitment to supporting long-term investment in the UK’s renewables industries.”
