Drax Group Wins Appeal On Subsidy Eligibility Of Biomass Conversion

Drax Group Plc said a decision by the U.K. government not to award one of its biomass conversion units a guaranteed power price had been overturned. A High Court judge said the move by the Department of Energy and Climate Change must be quashed and reconsidered, Drax said in a statement from its headquarters in […]

Drax Group Plc said a decision by the U.K. government not to award one of its biomass conversion units a guaranteed power price had been overturned.

A High Court judge said the move by the Department of Energy and Climate Change must be quashed and reconsidered, Drax said in a statement from its headquarters in Selby, North Yorkshire. DECC in December shortlisted two conversion projects to receive subsidies. In April it said only one was eligible, despite no changes to Drax’s project plans.

The contracts are precursors to the government’s contracts for difference, or CFDs. Those form part of a new assistance program for renewables that guarantees the price generators will get for their power for 15 years. Under CFDs, utilities will receive a guaranteed price per megawatt-hour of power they produce over a fixed number of years, regardless of the market price.

DECC has been given the option to appeal, according to the statement. Drax shares closed up almost 5 percent in London at 710 pence. The government said it may appeal the ruling.

“We believe that we ran a fair and robust bidding process for renewable generators seeking early contracts for difference,” DECC said in a statement.“We have been granted permission to appeal, and will now consider the decision carefully.”

From Bloomberg New Energy Finance: http://about.bnef.com/bnef-news/drax-wins-appeal-on-subsidy-eligibility-of-biomass-conversion/

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