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UK government greenlights second stage of controversial Drax carbon capture project

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Will Gardiner, chief executive, said the group continues to play an "essential role," in the UK's power mix
Will Gardiner, chief executive, said the group continues to play an "essential role," in the UK's power mix

The government has today approved Drax’s planning application to convert two of its biomass units into carbon capture facilities.

The decision letter, published this afternoon penned by the energy security and net zero minister Claire Coutinho, said that the government is satisfied the site can achieve 95 per cent capture efficiency and approved the site’s zero rating.

The approval is far from the final stage of the process however, with several rounds of official approvals to go before a final investment decision is expected in 2027.

The FTSE 250 company will be relying on funding to build the plant, part of which could be funded if the government grant an extension to its biomass subsidies.

Shares in the company rose 0.4 per cent as the news hit the markets late today.

The decision comes a day earlier than expected and hot on the heels of a public back-and-forth between Drax and climate change group Ember over whether the facility would cost or pay back the UK taxpayer in the billions.

Recent Baringa analysis funded by Drax claimed that the site could save the UK £15bn in whole economy costs between 2030 and 2050 whereas Ember research found it may cost the taxpayer £40bn between 2030 and 2050.

Will Gardiner, CEO Drax Group, said of the approval decision:  “The DCO approval is another milestone in the development of our BECCS plans, and demonstrates both the continued role that Drax Power Station has in delivering UK energy security and the critical role it could have in delivering large-scale carbon dioxide removals to meet Net Zero targets.

“We welcome the ongoing development of policy support for BECCS and the anticipated launch of a consultation on a bridging mechanism for biomass generators to take them from the end of current renewable schemes through to BECCS operations.”

The government is expected to release its biomass strategy consultation this week, a publication the National Audit Office (NAO) is expected to critique in its own subsequent report.