Drax blames government as £1bn carbon plant axed

Drax Group announced today that it’s to leave the White Rose project to build a carbon capture facility at its eponymous coal and wood pellet power plant in North Yorkshire, once its £3m feasibility study is completed later this year.

White Rose is one of more than a dozen carbon capture projects the United Kingdom has tried in vain to get under way in the past eight years.

In an attack on the government’s green energy policies, Drax put its decision down to “a drastically different… regulatory environment”.

Drax’s share price climbed this morning after the energy giant abandoned a £1bn carbon capture project because of the government’s policy u-turn on renewable energy.

Drax group operations director and Capture Power Board director, Pete Emery, said the firm would however remain committed to the completion of a study into the feasibility and development of the world leading technology.

Drax has indicated it will be fully committed to completing its current work on the project.

“The day it was announced our share price dropped by a third and that simply reduces the amount of cash we have available for future investments”.

However it “will not be investing further and will withdraw as a partner”.

Emery continued: “We will focus our resources on the areas, which we can deliver best value, particularly working with government to explore the potential for converting a fourth generating unit to run on sustainable biomass …”

Labour and unions blamed the Government for the situation.

Luke Warren, chief executive of the Carbon Capture and Storage Association, said it was a disappointing move. Private sector money is not necessarily the panacea for big nationally important schemes. Frances O’Grady, the TUC general secretary, said: “This is a very worrying development and shows how government backpedalling on energy and climate policy is costing the United Kingdom jobs and investment”.

Energy workers’ union Prospect warned that Drax’s decision to pull out will be a “body blow to low-carbon energy generation for the UK”.

Since forming a new majority government, the Conservatives have cut funding for a variety of green energy projects, including the once widely lauded Green Deal and solar renewable subsidies, attracting criticism from the Confederation of British Industry.

“We have also seen a £3.9bn carbon tax (the Climate Change Levy) on renewables that emit no net carbon – a step that even Lord Stern described as “potty”.