Court says Drax's 2nd biomass unit eligible for CfD

Jul 14, 2014 - The High Court has ruled that the second unit of Drax Group’s (LON:DRX) coal-to-biomass conversion project is eligible for the Contract for Difference (CfD) subsidy scheme, the UK power producer said today.

As a result, the court has ordered the Department of Energy and Climate Change (DECC) to reconsider its earlier decision on the matter. The entity has been granted leave to appeal.

Drax is working to convert to biomass three of the six 600-MW coal-fired power generators at the Drax power station at Derby. Operation of the first-converted biomass unit commenced in April 2013. In December 2013, the UK firm said that the second and third unit conversion projects will qualify for the CfDs, but the DECC eventually notified it that the second one will be excluded from the subsidy programme.

Under the CfD scheme, generators and developers receive a fixed strike price, or power purchase price, for the electricity they produce for 15 years. The system will replace the renewable obligation (RO) for all new renewable projects from April 2017. Early in June, the British government confirmed that it has signed early contracts for 4,548 MW of renewable energy capacity under the CfD programme.

(GBP 1.0 = USD 1.711/EUR 1.256)

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