Reports suggests energy giant could shelve plans for new gas plant, despite recent court victory
Speculation is mounting that Drax could shelve its proposed 3.2GW gas-fired power plant in North Yorkshire, as the energy firm gears up to make an announcement on the project later this month.
The Evening Standard reported yesterday that the company was expected to shortly pull out of plans to build Europe's largest gas power plant, prompting a statement from Drax that would only confirm that a further announcement on the project would be made later this month.
The speculation comes despite the project only last month clearing a major legal hurdle, when the Court of Appeal upheld the government's decision to approve the power plant, following a legal challenge from ClientEarth which argued it would undermine the UK's ability to meet its climate targets.
Following the court ruling, the company had looked set to begin development at the site near Selby, where Drax has already shifted four former coal-power units to run on biomass energy, with plans to close its remaining coal units in March.
However, late last year Drax sold off its other remaining gas power assets in a £193m deal. Then, earlier this week, the company announced a major £436m deal to buy Canadian pellet producer Pinnacle Renewable Energy in order to provide feedstock for its growing biomass power business, which the firm views as crucial to its plan to become a 'carbon negative' company by 2030.
In an interview with the Evening Standard, Drax CEO Will Gardiner said the gas power station was a "legacy" project, adding that "we have not announced what we are going to do, but there will be more clarity in February [when our results are published]".
And, in a statement yesterday, a Drax spokesperson reiterated that the firm "hadn't made an announcement" about its plans for the 3.2GW gas project, and that it would be providing more details during its annual financial results announcement on 25 February.
"We recently sold our other gas assets and will provide more clarity at our financial results in February," the statement added.
The statement also emphasised the firm's efforts to decarbonise its business through the recent acquisition of Pinnacle, which it said would "position Drax as the world's leading biomass generation and supply business" and further its 2030 ambition to become carbon negative.
The company has been trialing and testing carbon capture technologies at its biomass units, with an aim to eventually use such systems to draw more carbon dioxide from the atmosphere through the use of biomass feedstocks than the power plant generates through burning that feedstock and then capture the resulting emissions, thereby making it 'carbon negative'.
"Having converted two thirds of the power station to use sustainable biomass instead of coal Drax has already delivered carbon savings of more than 80 per cent making it the largest decarbonisation project in Europe," the statement added.
ClientEarth lawyer Sam Hunter Jones said if Drax was to scrap its plans for the Selby gas power plant, it would be "a massive win for the UK and its net zero goals".
The environmental law group has long argued that once fully operational, the Selby gas plant could account for up to 75 per cent of emissions from the UK's electricity sector as the wider grid decarbonises, and that allowing it to be built would undermine the UK's leadership credentials as co-hosts of the critical COP26 climate summit later this year.
"Over its lifetime, the plant would have risked the UK's net zero target, and could have locked in 15 years of subsidies or otherwise left the public picking up the tab if it was forced to shut early," he said. "With the global community looking to the UK for leadership this year, the government now needs to ensure every single one of its planning decisions are in line with net zero, and to close the yawning gap between its carbon promises and the reality."