Power generator Drax is suing the Government for changing its mind on support for a biomass project at the North Yorkshire plant.
The power plant’s second and third units are converting from coal to burn biomass instead, after a first one was swapped successfully.
Drax was expecting a decent chunk of cash from the Government’s mechanism to support low carbon energy – called an Investment Contract under an early round of the Contracts for Difference – to burn the organic matter rather than fossil fuel in both units.
But Drax said it has been told only the third unit will be eligible for this money, a u-turn described by its chief executive as a “disappointment”.
Dorothy Thompson said: “Nothing has changed, as far as our plans are concerned, between being deemed eligible in December and now. We have, therefore, commenced legal proceedings to challenge the decision.”
As consolation of sorts, the Department for Energy and Climate Change pointed to other sources of support for Drax such as the RO (Renewable Obligation) or CfD (Contract for Difference) regimes.
A DECC spokesperson said: “Following the assessment of Drax’s binding application for Unit 3, the project did not continue to meet the Qualification Criteria and therefore no longer qualified for the award of contract.”