Drax axes plans to build new biomass power stations
The company which owns Drax power station in North Yorkshire, which is the largest single producer of electricity and carbon dioxide in the country, has announced that a £1.4 billion plan to build 2 of 3 new dedicated biomass power stations have been shelved.
The third of the planned power stations, at Immingham, may still go ahead at a later date.
The decision comes following an ongoing review of renewables and their subsidy levels, details of which were announced in October last year.
In the review the government recognised that burning biomass alongside coal in so called 'co-firing' power stations, which already happens at the existing Drax power station near Selby, is a much more economical way of producing green electricity and involves lower subsidy levels, than building new dedicated biomass power stations.
At the moment, Drax power station has the capability to produce 12.5% of its output from sustainable biomass, the remainder from coal, but is not utilising that capability to the full because the current level of support makes it uneconomical to do so.
As a result of the proposed changes to subsidy levels announced in the review, which come into force in April 2013, Drax has said that it will be able to burn more biomass in place of coal, investing £50 million this year to increase its biomass co-firing capability to 20%, thus reducing its carbon footprint.
This investment will enable the company to store and handle increased amounts of biomass meaning that an additional 300MW of the total power generated by the Drax facility will be 'green energy' from biomass.
Under the original plans, one of the proposed new dedicated biomass plants that was to be built alongside Drax would have cost £600-£700 million, but crucially would have only generated the same 300MW of green electricity.
Because the level of subsidy that Drax would receive recognises the associated costs of the technology, the subsidy they receive by going down this new route - which is effectively paid by consumers on electricity bills - will be much lower.
In short, the government have indicated that it is much more cost effective to eventually convert coal fired power stations to biomass power stations than it is to build new ones, and that this is a long term aim, as they strive to drastically reduce the country's carbon footprint.