Drax shares fall after its project misses out on UK carbon cash

Posted: March 30, 2023 by oldbrew in climate, Energy, government, News, Subsidies
Tags: ,

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.

  1. tallbloke says:

    Price has fallen from 824p a year ago to 613p today. Burnng chipped up forests is not a good investment.

  2. ivan says:

    It appears that Drax is nothing more than a subsidy farmer just like all those with bird killing windmills
    Why should they be given tax payers money to try and lock up the much needed plant food of carbon dioxide when we need more of it to give healthy food crop production? Is this all part of the WEF plan to reduce the overall population of serfs or something more sinister?
    It is strange they get special privileges for producing such a small amount of electricity compared to the real power generators.

  3. oldbrew says:

    Climate miserablists whine as usual…

    New UK net zero strategy won’t meet climate targets or cut energy bills, critics say
    Thursday 30 March 2023 at 12:07pm

    The proposals see the government stress its £20 billion investment in carbon capture technology and backing for new projects, as well as £160 million for port infrastructure to help expand offshore wind.

    – – –
    An ‘investment’ with no return? Say goodbye to the money.

  4. oldbrew says:

    Reuters is wrong here: ‘its Track-1 programme which is part of a 20 billion pound a year funding scheme it announced this month’.

    Even the UK climate policy isn’t that crazy…

    The Treasury has confirmed that, at the Budget, Chancellor Jeremy Hunt will announce a £20bn investment plan to scale up the UK’s carbon capture sector, to be spent over a 20-year period. [bold added]


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