Drax has scrapped its controversial plans to build Europe’s largest gas power plant at its site in North Yorkshire following fierce opposition from climate groups.
The electricity generator confirmed that it would drop plans to build two combined cycle gas turbines (CCGTs) in place of two old coal burning units at the Drax site, weeks after completing the sale of four other gas plants to a subsidiary of Vitol last month.
The decision to cancel the plans draws a line under three years of opposition from green groups who argued they were inconsistent with the UK’s ambitions to lead the world in reducing greenhouse gas emissions.
The opposition included a legal challenge against the government after ministers overruled the climate change concerns raised by the UK’s planning authority, which said the 3.6GW plant would undermine the UK’s legally binding climate targets. The challenge failed in the court of appeal last month.
Drax plans to turn its back on fossil fuels after decades as one of the UK’s biggest coal plant operators. It has promised to end its commercial sales of coal-fired electricity from next month, ahead of the government’s 2025 ban on coal power.
The decision to scrap the new gas project will cost the company £13m, according to its annual financial reports. It reported a £156m operating loss for 2020, after recording a total charge of £239m from the cancelled gas project and writing off the value of its remaining coal inventories, and counting the £34m cost of closing its coal burning units.
The FTSE-listed utility plans to focus on plans to generate more electricity by burning wood chips, known as biomass, which it claims is a carbon neutral “renewable” energy source because the trees absorb carbon dioxide before they emit carbon while burning in a power plant.
Scientists and environmentalists have questioned the carbon accounting of biomass burning, and whether growing trees and shipping the wood pellets can be considered sustainable. Companies including Drax have produced scientific papers which they say proves that biomass can be considered a clean energy source.
Will Gardiner, the chief executive of Drax Group, said the company’s plan to buy Pinnacle Renewable Energy – a major manufacturer of wood pellets in Canada – would “position Drax as the world’s leading sustainable biomass generation and supply business” and pave the way for Drax to “develop bioenergy with carbon capture and storage (BECCS) – taking us even further in our decarbonisation”.
Drax claims that using carbon capture technology to trap the emissions from the burning wood at its sites would make its power plant “carbon negative” by 2030. The claims are disputed by scientists and green groups.