Drax abandons plans to build new gas plant

Power giant Drax has abandoned plans to build Europe’s biggest gas power plant following strong opposition from environmental campaigners.

The company will no longer install the two gas turbines for electricity generation at the site of its power plant in North Yorkshire.

It marks a move away from fossil fuels and towards biomass for the power generator, which last year sold its four remaining gas plants. The Selby plant has been running for 46 years.

Chief executive Will Gardiner said: “We are announcing today that we will not develop new gas-fired power at Drax. This builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations.”

The plant’s transformation away from coal started in 2003, when Drax began to burn biomass at the site, mixing it in with coal, which still made up 95% of the fuel.

In 2013 the company started to convert the coal burners to run on biomass alone, and it will phase out coal completely by March of this year, ahead of the Government’s 2025 deadline.

In 2019 the company was given planning approval for the two gas burners, which would replace coal burning at the site, a decision that faced an unsuccessful legal challenge.

Gas generation is considerably cleaner than coal power, however it is still a fossil fuel which emits carbon and contributes to global warming.

Thursday’s decision to abandon the plans was welcomed by Catharina Hillenbrand Von Der Neyen, from Carbon Tracker, which separately released a report warning that gas power investments risk becoming stranded assets and putting the UK’s climate ambitions at risk.

She said: “This clearly underlines how power companies are waking up to the reality of the unfavourable economics of new gas plants and making the right investment decision by shelving their plans.”

Drax is now focusing on burning wood pellets to generate power at the site. Proponents of the technology argue that trees absorb the carbon from the atmosphere that is later released through burning.

However the technology also has critics who question its benefits over other renewable technologies such as wind and solar.

Earlier this month Drax said it would pay £226 million to buy biomass producer Pinnacle Renewable Energy. But it later faced criticism after it was revealed that Pinnacle burns natural gas to make its wood pellets.

Mr Gardiner said: “The proposed acquisition of Pinnacle Renewable Energy will position Drax as the world’s leading sustainable biomass generation and supply business, paving the way for us to develop bioenergy with carbon capture and storage (Beccs) – taking us even further in our decarbonisation.”

Drax said it had booked a £13 million hit from abandoning the new gas generation plans for the power station.

It contributed to widening loss before tax to £235 million in 2020, from £16 million a year before. Revenue hit £4.2 billion, down 5%.

Drax sold around 7% less gas and electricity last year due to the impact of Covid-19.

Sam Hunter Jones, a lawyer at environmental law charity ClientEarth, who challenged the gas plant in court, said the decision is “a massive win for the UK and the climate”.

“Just as the coal era is long gone, what Drax’s statement today makes clear is that time is up for building any new large-scale gas power plants in the UK,” he said.

He called on the Government to ensure that new power developments are in line with its own emissions targets.

“With the UK hosting this year’s (United Nations) Cop climate talks, the Government needs to ensure each and every planning decision is in line with net-zero, and close the yawning gap between its carbon promises and reality,” he added.