Drax might drop plans for two 299-MW biomass power plants in U.K., saying government's proposed subsidy level is too low

Audrey Dixon

LOS ANGELES , November 15, 2011 (Industry Intelligence) – Drax Group Plc said Tuesday that it might not build two planned biomass plants in England of 299 megawatts each because the government's proposed subsidy level is too low, Reuters reported Nov. 15.

The government and Selby, Yorkshire-based Drax are currently reviewing the Renewable Obligations Certificate (ROC) reward levels for dedicated biomass power plants, aimed at providing a financial incentive for such projects.

The energy minister approved the proposed Drax facilities in August.  They are the Heron Renewable Energy Plant in Imminghan, Lincolnshire, and the Ouse Renewable Energy Plant in Selby, North Yorkshire, according to the company's website.

In October, the U.K. said it was looking at revising the ROC subsidies and suggested a 1.5 ROC reward per megawatt-hour produced, Reuters reported.

A Drax spokesperson said the company was reviewing the ROC level it needs to proceed with developing the biomass plants.

Consultation on the state aid is scheduled to end Jan. 12, 2012, reported Reuters.

Drax Power Ltd., a subsidiary of Drax Group, owns and operates the 3,900 megawatt-capacity Drax Power Station in North Yorkshire, which can burn both biomass and petcoke, according to the company website.

The primary sources of this article are Reuters, London, England, on Nov. 15, 2011, and Drax Group's website.

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