Drax has abandoned a plan to build a gas-fired power plant in Yorkshire, which had attracted significant opposition from environment groups.
The FTSE 250 group said on Thursday the move “builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations”.
This month it sold off its only four operating gas plants to a power company owned by oil trader Vitol. It will also stop burning coal at the UK’s biggest power plant in Selby, North Yorkshire, next month to concentrate on biomass, which involves generating electricity by burning wood pellets.
Biomass is classified by the UK government as renewable energy and Drax benefits from subsidies that expire in 2027 but some environmentalists strongly oppose it, arguing it is heavily polluting.
Drax was granted planning approval in 2019 for a gas-fired power plant in Selby by the then energy secretary Andrea Leadsom. That decision was unsuccessfully challenged in the High Court by environmental lawyers from the non-profit group ClientEarth.
The permission would have allowed Drax to construct Europe’s biggest gas-fired power plant.
The decision to go ahead with construction had always been contingent, however, on the company securing a satisfactory contract through a UK government auction that offers power companies agreements to ensure there is adequate supply during winter. Other companies that previously wanted to build large-scale Combined Cycle Gas Turbines had warned the auction clearing prices were too low to finance schemes.
Drax this month unveiled plans to more than double its biomass production capacity by buying a Canadian supplier of “sustainable” biomass, although that deal has, too, attracted criticism from environmentalists as it burns gas to make the wood pellets.