Drax shares rise amid UK government ‘discussions’

Shares of North Yorkshire power generator Drax Group rose as much as 6% on Thursday after it said the UK government has confirmed its commitment to support the deployment of large-scale Power BECCS (Bioenergy with Carbon Capture and Storage) projects by 2030.

The firm said Drax Power Station BECCS project has “passed the deliverability assessment for the Power BECCS project submission process.”

Drax said it has been invited “to enter formal bilateral discussions with the government immediately, to move the project forward and ensure the government is able to fulfil its restated commitment to achieving 5Mtpa of engineered Greenhouse Gas Removals (GGRs) by 2030.”

Drax said it believes that BECCS at Drax Power Station is the only project that can enable the government to achieve this goal.

It said the government has also committed to publish its biomass strategy by the end of June 2023 which will set out how the technology could be deployed.

“During 2022 carbon removal projects, including Power BECCS, were progressed in parallel with the Track 1 process for gas, hydrogen and industrial CCS projects,” said Drax.

“While Power BECCS and other shortlisted projects are not included in the immediate Track 1 process, the Government has confirmed that in 2023 it will set out a process for the expansion of Track 1 and has today launched Track 2. BECCS is eligible for both.

“Separately, the government has stated that it will work closely with electricity generators currently using biomass to facilitate a transition to Power BECCS.

“The government has also confirmed that its response to the Power BECCS business model consultation, which took place in 2022, will be published imminently, providing further clarity on the delivery of BECCS as soon as possible.”

Drax Group CEO Will Gardiner said: “Delivery of BECCS at Drax Power Station will help the UK achieve its net zero targets, create thousands of jobs across the north and help ensure the UK’s long-term energy security.

“We note confirmation that our project has met the Government’s deliverability criteria and Government remains committed to achieve 5Mtpa of engineered Greenhouse Gas Removals by 2030 – a goal that cannot be achieved without BECCS at Drax Power Station.

“We will immediately enter into formal discussions with Government to take our project forward.

“With the right engagement from Government and swift decision making, Drax stands ready to progress our £2bn investment programme and deliver this critical project for the UK by 2030.”