Member Article

Drax loses court battle against Government

Selby-based Drax has confirmed that it has lost its Court of Appeal battle against the Government over its eligibility for a lucrative biomass subsidy.

Drax owns a large coal-fired power station in North Yorkshire, England, capable of co-firing biomass and petcoke.

The firm is currently converting its units from coal to biomass and is bidding for a bigger subsidisation for its move into renewable energy.

The Department of Energy and Climate Change (DECC) appealed against the High Court judgment that Drax’s second unit conversion is eligible for an Investment Contact. Shares dropped nearly 10% on the release of the Court’s decision.

The Court of Appeal has allowed the DECC’s appeal and dismissed Drax’s application for judicial review. This means that the second unit conversion is no longer eligible for an Investment Contract. Having taken legal advice, Drax has said that it will not appeal against this decision.

Drax says it will now consider its options for the full conversion of this unit, where eligibility for support under the Renewables Obligation has been confirmed.

A DECC spokesperson told Bdaily: “We believe that we ran a fair and robust process and are pleased that the Court of Appeal has upheld decisions we took in respect of Drax’s Unit 3.

“We will now work with Drax to find the best outcome for its Unit 3.”

This was posted in Bdaily's Members' News section by Clare Burnett .