Source: The Guardian
Key shareholder blames cuts in renewable energy subsidies for decision to abandon White Rose CCS
Dorothy Thompson, chief executive of Drax, in front of the power station’s cooling towers in Selby, North Yorkshire. Photograph: Rex
An ambitious plan to build a £1bn prototype plant to capture carbon from a coal-fired power station in North Yorkshire is under threat after a key shareholder pulled out.
Drax, owner of the country’s biggest single power station, blamed cuts in renewable energy subsidies by ministers for the decision to abandon the White Rose carbon capture and storage (CCS) scheme, triggering a claim that the government energy strategy is “unravelling”.
Alongside the engineering company Alstom and industrial group BOC, Drax was intending to build a new power station next to its existing plant which would capture the CO2 and send it via pipeline for burial in an old North Sea oilfield.
Dorothy Thompson, the chief executive of Drax, said her company had been forced to withdraw because changes to the subsidy regime had left it short of cash to invest in the White Rose project.
She told the BBC: “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 UK and this has suddenly removed a stream of income.
“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.”
The consortium, of which Drax was part, said it still wanted to proceed with the scheme and is one of two bidders competing for £1bn of government money to trial CCS on a commercial power station. The only other bidder is Shell and the big six energy supplier SSE, who want to trial CCS at a gas-fired power plant at Peterhead, in Aberdeenshire.
Lisa Nandy, the shadow energy and climate change secretary, said ministers needed to spell out exactly what their policies were in the light of widespread subsidy cuts.
http://gbpp.org/en/2015/10/8625