Drax powers ahead as EU approves UK support of plant conversion
Drax powered ahead on Monday after the European Commission approved the UK’s support of its plans to convert a unit of its power station from coal to biomass.
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The EC – which had launched an investigation back in January to check that the aid would not lead to overcompensation and undue distortions of competition in the biomass market – said the project will further EU environmental and energy targets.
The UK government intends to support the project with a premium paid on top of the market price of the electricity generated, with support lasting until 2017.
Approval of the contract for difference was a condition of the FTSE 250 power generation company’s proposed acquisition of business energy supplier Opus Energy, which was announced earlier this month.
Drax chief executive Dorothy Thompson said: "We are pleased the European Commission has completed its review of the contract and approved it in line with our expectations. We now look forward to fully converting the unit to run on sustainable biomass.
“Drax is already playing a vital role in helping change the way energy is generated, supplied and used as the UK moves to a low carbon future.
"With the right conditions, we can do even more, converting further units at Drax to use sustainable biomass in place of coal and through rapid response gas projects to plug the gaps created by intermittent renewables.”
At 1225 GMT, the shares were up 6.5% to 345.10p.