Drax pulls out of carbon capture scheme

“Critical reversals” in government support for green energy made “a severe impact on our profitability”, Peter Emery, the Drax board member chairing the group developing White Rose carbon capture project, told the Financial Times. So not the ideal green solution, but better than what now exists.

Speaking to the BBC, she said: “The most recent effect has been the government has removed a tax exemption for renewable power that is sold to industrial companies and we’re the largest generator of renewable power in the United Kingdom and this has suddenly removed a stream of income”.

The levy is expected to cost Drax £90m over the next two years and caused a significant drop in its share price.

In other words, the future is still looking pretty bleak.

Once operational, carbon capture would have offered a way for fossil fuel firms to keep burning coal or gas in power stations without damaging the climate.

“We are confident the technology we have developed has real potential, but have reluctantly taken a decision not to invest any further in the development of this project”.

The company said that due to lack of profits it had to put the business and shareholders first.

Drax would also still make the power plant site and infrastructure available for a CCS project to be built there, he said.

Capture Power said it was still committed to delivering the CCS project and a final investment decision will depend on the outcome of an engineering and design study.

“Ministers need to step up to the plate with public investment to ensure that the £1bn White Rose carbon capture project comes to fruition, otherwise the massive coal reserves that the United Kingdom is sitting on will remain untapped.”The underlying message here is that the private sector has been unable to provide the necessary investment to support the carbon capture initiative – this should be a salutary lesson”.

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.

The energy company was working on a scheme to store carbon dioxide next to its coal-fired power station – the biggest in the UK. “The government remains committed to assisting the development of CCS in the United Kingdom and to the CCS competition, continuing to negotiate with the two preferred bidders”.