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Drax pulls out of White Rose carbon capture project

28 September 2015

UK energy company Drax has pulled out of plans to develop one of the world’s first commercial scale carbon capture and storage coal-fired power plants. The company had been a key partner in the White Rose CCS project, which plans to build a new CCS-enabled coal-fired power station next to Drax’s existing plant near Selby, North Yorkshire.

Artist's impression of the White Rose CCS Plant
Artist's impression of the White Rose CCS Plant

Capture Power, the consortium heading the £2bn project in Selby, Yorkshire, said it would continue with the support of its two remaining backers, Alstom and BOC.

Capture Power chief executive Leigh Hackett said: "Drax’s decision not to invest further in the project is disappointing, but we are keen to confirm that Capture Power remains committed to delivering the White Rose CCS project."

Drax chief executive Dorothy Thompson blamed the government’s recent decision to remove subsidies for renewable power, which had supported the firm’s conversion of two of its six sub-plants from coal to wood pellets, with another planned.

"This has suddenly removed a stream of income," Thompson told the BBC. "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."

Since May’s general election, the government has extended the climate change levy to apply to renewable energy projects, such as the White Rose CCS. The levy is expected to cost Drax £90m over the next two years.

Earlier this month, Drax and renewable energy firm Infinis brought a judicial review against the government over the levy decision. That review is still being heard.

Drax operations director Pete Emery said: "The decision is based purely on a drastically different financial and regulatory environment and we must put the interests of the business and our shareholders first."

If built, the White Rose plant will produce 448 MW of energy, powering more than 630,000 homes. The proposed power station will capture 90%of its carbon emissions, which will be transported through a new pipeline to a permanent storage site beneath the North Sea.

Mr Emery confirmed that Drax still supported the project and was "fully committed" to completing a study into its feasibility and development.

He said: "Drax still believes this project has great potential and we have announced that the site at the Drax Power Plant, along with our existing infrastructure, remain available for the project to be built."

The White Rose project is one of two plants being developed in the UK using carbon capture technology. The other is run by Shell and SSE in Peterhead, Scotland.

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