Renewables Obligation Banding Review Consultation
20 October 2011
DRAX GROUP PLC
(Symbol: DRX)
RENEWABLES OBLIGATION BANDING REVIEW CONSULTATION
The Government has, today, published its Renewables Obligation (RO) Banding Review Consultation, setting out proposed support levels for the various renewable technologies under the RO which will come into effect from April 2013. Commenting on the proposed levels of support for biomass, Dorothy Thompson, Chief Executive of Drax said:
"We appreciate the extensive work undertaken by the Government on biomass options and we welcome the recognition of the strategically important role that sustainably-sourced biomass electricity can play in the future UK renewable energy mix. We are pleased that the Government, in seeking to maximise the deployment of the cheapest renewable technologies, has created specific support levels for the increased use of sustainable biomass in existing coal-fired power stations through enhanced co-firing and full conversion.
"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.
"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. This will lead to lower electricity prices for the UK consumer, who will otherwise bear the cost of the more expensive alternatives required to meet the UK's 2020 climate change targets.
"In addition to our focus on biomass co-firing at Drax Power Station, we have been working with Siemens Project Ventures on our dedicated biomass developments. We are disappointed with the proposed level of support for this technology, which makes the investment case for the developments highly challenging.
"We note that this is the start of a consultation period and we will play our full part in the consultation process."
The Renewables Obligation Banding Review is critical to ensuring electricity from biomass achieves its full potential. Given an appropriate level of regulatory support, Drax is prepared to expand significantly its renewable power generation to become, in time, a predominantly biomass fuelled generator and to contribute greatly to the UK's renewables and carbon reduction targets.
Notes to editors
1. Drax has been burning biomass since 2003 and is today the country's biggest producer of biomass generated electricity and the UK's largest generator of renewable electricity from a single facility.
2. Biomass burnt at Drax delivers life cycle carbon footprint savings of over 50% compared to a typical gas-fired generating plant.
3. The biomass burnt by Drax predominantly consists of natural residues from the forestry industry and agricultural production and is sourced in accordance with strict sustainability requirements which are independently monitored.
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Enquiries:
Drax Investor Relations: Michael Scott
+44 (0) 1757 612 230
Media:
Drax External Affairs: Melanie Wedgbury
+44 (0) 1757 612 438
Brunswick: Michael Harrison
+44 (0) 207 404 5959
Website: www.draxgroup.plc.uk
END
This information is provided by RNS
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