Drax shares jump over nine per cent as company expected to win multi-billion pound carbon capture contract
Power generation group Drax could be set to receive a major government funding injection for a carbon capture and storage project.
According to the Telegraph, energy secretary Claire Countinho is close to approving the project, which involves the addition of two carbon capture plants to the existing generating units in North Yorkshire.
Drax claims that the project will allow the company to be “carbon-negative” by removing and storing the carbon released from its energy production process, a claim that has come under significant scepticism.
This included criticism from green groups after in 2022, BBC Panorama alleged that the wood used in its biomass plants are from some of the world’s most precious forests, rather than the sustainable waste wood which Drax claims.
The company’s share price lept over nine per cent today following the speculation.
The final decision on the project has been pencilled in for 17th January
Reports suggest a consultation will be commissioned to explore options for extending the subsidy system, through which Drax received £617m from consumer energy bills last year.
The company’s BECCS proposal missed out on the ‘track one’ and “track two’ processes outlined by the government.
If it is greenlit, the project is due for completion in 2030.