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.”
- 1 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 2 What supermodels really think about posing in the nude
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Black teen in critical condition after store employee 'shoots him for stealing 79-cent pack of cookies'
- 5 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
North Korean defector flees to Finland 'with evidence of chemical testing on humans'
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
Father faces deportation to Thailand after 27 years in Britain for two 'stupid crimes'
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...