Drax Drops Gas Plant Plan

By Paul Homewood



This news sums up everything that is wrong about UK energy policy:



Drax has dropped plans to develop any new gas plants, including its plans to build Europe’s biggest CCGT plant as it moves to turn its back on fossil fuels.

In the company’s full year results for 2020, it set out its plans for carbon neutrality, committing to no new gas generation and the end of commercial coal in March 2021.

“Our focus is on renewable power,” said Will Gardiner, CEO of Drax Group. “Our carbon intensity is one of the lowest of all European power generators. We aim to be carbon negative by 2030 and are continuing to make progress. We are announcing today that we will not develop new gas fired power at Drax. This builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations.”


For all the fancy talk about renewable energy, the decision to abandon the new CCGT plant, which Drax themselves have been praising for the last few years, is purely economic. The stark reality is that cannot make money under current policy, even with the help of Capacity Market support.

Because of obscene, market wrecking subsidies paid to renewables, gas power plants cannot compete on level terms, and consequently run well below viable capacity levels.

The UK is, of course, desperate for new gas power capacity, to fill the gaps when the wind stops blowing.

Meanwhile, Drax’s Annual Accounts show just how much they are raking in subsidies for biomass.

CfD subsidies totted up to £342 million last year, with ROCs bringing in an other whopping £495 million, a total of £837 million. With biomass generation of 14.1 TWh, this works out at an average of £48/MWh:





And government hand outs don’t stop there, as Drax also earned £118 million for system support services, now so essential because of unreliable renewable generation:




Without all of these subsidies, Drax would of course be bankrupt. Their strategy now is to continue to build the biomass side of the business, and hope to get more government money to subsidise carbon capture.



February 25, 2021 at 12:54PM

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