Biomass on the move [image credit: Drax]
Latest from the strange world of so-called climate finance. Champion biomass burner’s share price drops when massive government handout not forthcoming.
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(Reuters) -Shares of British power generator Drax fell on Thursday after the government turned down its carbon-capture project for the country’s latest funding round for the technology, reports Reuters (via Yahoo News).
Drax hopes to build a 2 billion pound ($2.47 billion) CCS project alongside its 2.6 gigawatt biomass power plant in Yorkshire, northern England.
But to do this the company has said it would need clarity from the government on a funding model and has paused development of the project.
The government said on Thursday the project was not selected for its Track-1 programme which is part of a 20 billion pound a year funding scheme it announced this month, but said it would engage further with the project following an assessment outcome.
Drax said it has been invited to begin bilateral discussions with the government to move the project forward.
“With the right engagement from Government and swift decision making, Drax stands ready to progress our 2 bn pounds investment programme,” Will Gardiner, Drax Group CEO, said in a statement.
Shares in the company fell as much as 12% in early trading but by 1002 GMT were at 564 pence per share, down about 2% from Wednesday’s close.
An existing subsidy scheme for the biomass units, which provide about 6% of Britain’s electricity, runs out in 2027, which a Drax spokesperson previously said could make them unviable.
“The concern now for Drax is how do they fill the cashflow cliff that exist post 2027,” analysts at Citi said in a research note.
Full report here.
via Tallbloke’s Talkshop
March 30, 2023 at 06:32AM
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