Government support proposals lift Drax

20th Oct 2011 12:44

Shares in Drax, the operator of a coal-fired power station in North Yorkshire, roared higher after the government proposed doubling support levels for companies producing energy from biomass.The government has proposed that it will give Drax one Renewables Obligation Certificate (ROC) for every MWh of energy it produces using biomass, a renewable fuel made from biological materials. ROCs are used to determine how much support is given to green energy companies."The proposed level of 1.0 ROC/MWh for enhanced co-firing will enable us to increase our co-firing, but we would need a moderate uplift to maximise our potential for producing this low cost renewable electricity," said Drax."If support were to be increased from the proposed level, we believe it would further the opportunity for burning biomass in place of coal in the UK's coal-fired generation plant."While support for creating energy with biomass and other methods of power generation was increased, support for onshore wind generation was reduced from 1 ROC/MWh to 0.9 and for hydro-electric generation it was halved to 0.5."Where new technologies desperately need help to reach the market, such as wave and tidal, we're increasing support," Energy and Climate Change minister Chris Huhne said. "But where market costs have come down or will come down, we're reducing the subsidy."---RG