Burning question over Drax biomass plans

James Barrett-Miles, assistant director for energy and environmental infrastructure advisory at Ernst & Young, suggested it was uncertain whether the three biomass-fired generating plants would ultimately be built.

Drax has so far invested £100m to burn organic plant-based materials alongside coal at its power generator, near Selby, but is holding back on more investment as it waits for ministers to announce details of their review of subsidies for renewables.

Mr Barrett-Miles told a Leeds renewables event: “The Drax effort is an opportunity and a threat to making biomass work in the region.

“It could hoover up the support and drive others out of the region.

“It will be hugely challenging for Drax to build three 300MW facilities. They may get one away.”

The Government has set out plans for 15 per cent of energy to come from renewable sources by 2020, and Dorothy Thompson, chief executive of Drax, has said the case for biomass is “compelling”, particularly at facilities like those of her company, which were built for coal-fired electricity generation.

Ministers are expected to reveal outline banding proposals for subsidies in July before a final decision in December.

He was speaking at a Leeds Cleantech Cluster Event, attended by figures from the banking, biorenewable and local authority sectors, at the offices of law firm Addleshaw Goddard.

A spokesman for Drax said it and other companies are waiting for the outcome of the Government’s review of support levels for renewable technology.

“With the right level of support for biomass Drax stands ready to make a consistent, timely and cost-effective contribution to electricity generation from renewables and reducing carbon emissions.”

Meanwhile, Alex Pohl, a renewables expert from HSBC, signalled doubts over the funding of the Green Investment Bank. The Government-backed institution has been dogged by Whitehall disagreements about whether or not it should be able to raise its own capital, amid concerns its borrowing could undermine efforts to cut the deficit.

Mr Pohl said: “If the public sector could take the risk, it would be a utopian solution, but I think we will have to take it that this Government and future governments and councils cannot unless they start selling assets.”