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Evening Standard: Drax is poised for biomass push if subsidies are boosted


Britain's biggest power station, Drax, threw down the gauntlet to the government today, pledging to invest up to £700 million to transform itself into a biomass energy generator but only if subsidies are increased.

The coal-fired power plant said it was willing to invest heavily to become an energy generator that was primarily fuelled by renewable biological materials from living, or recently living, organisms from wood to cocoa shells.

It is preparing to raise an estimated £300 million-£400 million of cash to help finance its biomass drive, with a rights issue and debt issue thought to be among the options it is considering.

Drax, which is also the biggest power station in western Europe, would fund the rest of the investment from the £225 million of cash from its balance sheet and profits.

Chief executive Dorothy Thompson said: "Drax is ready to transform itself into a predominantly renewable generator, but to do so we need appropriate regulatory support, and to that end we look forward to the timely conclusion of the Government's current review."

The government is due to complete its review into subsidy levels for biomass-generated electricity in the spring.

It is proposing to double the subsidy level to one renewable obligation certificate per unit of electricity.

A greener solution but it can cost

Defined as materials from living, or recently living, organisms, biomass has a pretty broad brief.

Trees are the obvious one, but it also includes human and animal excrement, food waste, paper, industrial and household rubbish, corn, sugar cane, grape flour and palm oil. Biomass can be used to generate energy in a variety of ways. The most popular is by simply burning it and using the heat generated to produce energy.

On the plus side, biomass is renewable, reduces waste going to landfill and is reasonably environmentally friendly. On the downside, the process is expensive.