A plan to build a £600m biomass power plant in North East Lincolnshire has been scrapped.

 

Drax Power Limited, which runs the Drax power station near Selby, confirmed it had cancelled the Immingham scheme.

 

It said a reduction in government subsidy for biomass from 2016 made the investment case for the project "highly challenging".

 

The plant, which would have burned organic produce, was expected to employ 1,000 people.

 

Drax cancelled a biomass scheme on land next to its power station in Selby in February for similar reasons.

 

And on Wednesday Centrica said it was abandoning proposals for new plants in Cumbria and in North Lincolnshire because they were no longer "in favour".

 

The Drax spokeswoman said the company was proceeding with a project which will convert half of its coal-fired power station in Selby to biomass.

 

She said: "Government has made clear its intention to focus the deployment of biomass electricity over the period 2013-2017 on the cheaper, transitional technologies of conversion and co-firing, that is, technologies which replace coal with biomass in existing coal-fired power stations.

 

"This is something that we support and have always promoted.

 

"We very much have a biomass future."