Drax is spending £700 million on converting half its six units to burning biomass
such as wood, instead of coal
Tim Webb
Coal plants are needed to prevent blackouts by backing up wind farms when the wind does not blow, according to the chief executive of Britain’s largest power station.
Dorothy Thompson, who runs Drax, the coal and biomass plant, said that people were only now starting to appreciate the problem that wind farms pose.
The Government will soon offer subsidies, funded by levies on consumer bills, to power stations to switch on quickly when wind farms are not generating sufficient electricity, under so-called capacity auctions. Environmentalists are opposed to subsidies going to coal plants, which emit twice as much carbon as gas plants and are supposed to be phased out by environmental legislation and taxes.
Drax, which generates 7 per cent of the UK’s electricity, yesterday said it was interested in taking part in the first auction, which takes place next year to cover the winter of 2018, as fears grow about the danger of blackouts. Ofgem has said that within two years Britain’s spare generating margin could fall from 14 per cent to as low as 2 per cent.
Ms Thompson said: “One of the unfortunate things about our market is it has taken time for the non-experts to appreciate the challenge of handling intermittency. It’s only now that we have significant wind that the challenge has become clear. We have always believed that Drax is a strategic asset.”
Drax is spending £700 million on converting half its six units to burning biomass such as wood, instead of coal. Burning biomass is supposed to be greener as new trees can be planted as replacements and to absorb carbon from the atmosphere. Biomass also avoids taxes targeting coal-fired generation. The company, which has converted one unit, reported a 22 per cent slump in first half pre-tax profits to £120 million from £154 million last time on revenues of £919 million. For the first time it had to pay for all its carbon permits under the EU’s trading scheme as well as a new UK carbon tax. Shares closed up 8p, or 1.3 per cent, at 639½p.
———————————————————————————————————–
1 Comment