Drax tumbles over Government U-turn on subsidy terms

 

Shares in Drax fell 10 per cent after the Government said a new subsidy scheme would only apply to limited part of its plan to convert much of its giant coal-fired plant into biomass burners.

Drax said it had commenced legal proceedings after the government said it would only support the conversion of one of its coal units under a new subsidy scheme, rather than two as it had previously indicated.

The government had short-listed both conversion units for one of its Contracts-for-Difference scheme subsidies in December.

“Nothing has changed, as far as our plans are concerned, between being deemed eligible in December and now. We have, therefore, commenced legal proceedings to challenge the decision,” said Drax chief executive Dorothy Thompson.

She said she was pleased to have secured an “investment contract” for the other unit conversion.

 Shares in the power giant fell by 78p to 689.53p. The Department for Energy and Climate Change declined to comment on the Drax case.

Drax’s concerns came to light as the government gave the go-ahead for the first eight renewable energy projects to receive support under its new subsidy scheme.

They will collectively generate enough green energy to power three million homes, or 4% of Britain’s total consumption, and support 8500 jobs, the government said.

Energy Secretary Ed Davey said he expects the projects to attract  £12 billion of private investment.

The approved schemes include offshore wind farms in Liverpool bay, and off the Moray, Norfolk and Yorkshire coasts. They also include biomass plants at the Drax complex in Selby and in Middlesbrough.

Davey said the eight approved schemes had been chosen from 57 applications meaning that, even if one or more of the chosen projects fell through, there would be similar ones waiting to take their place.

“We are confident that the eight will go ahead, but if a company decides not to go ahead there will be another one queuing up behind,” he said. “These investments are critical to make sure we have got secure, clean energy.”

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate