Government’s energy policy in spotlight as Drax pulls out of £1bn carbon capture plan

Cuts to green subsidies leave investors reeling

Power Station North Yorkshire

The Drax Power Station, North Yorkshire

The government’s cuts to green energy subsidies have caused energy giant Drax to pull out of a £1bn carbon capture plan at its North Yorkshire power station.

The company said the cuts made the green energy scheme too risky to go ahead with.

Drax board member Peter Emery said to the Financial Times that the government had made several “critical reversals” to energy policy, which have had “a severe impact on our profitability”.

He added: “We’ve also got concerns about the government’s future support for the low carbon agenda and that’s left us in a position where we are no longer confident we can persuade our shareholders that this is an attractive investment, given the obvious risks.

“The government has to make difficult decisions based on affordability and, in turn, so are we.”

Mounting concerns over the government’s decision to abandon green energy subsidies this week prompted CBI director general John Cridland to criticise the plans.

“With the roll-back of renewables policies and the mixed messages on energy efficiency, the government risks sending a worrying signal to businesses,” Cridland said.

Accountancy firm EY also lashed out at the government’s stance. It said that investors and consumers in the UK have been left “confused” by “a wave of policies reducing or removing various forms of support for renewable energy projects”.

The UK has been bumped down to 11th place behind Chile in the firm’s Renewable Energy Country Attractiveness Index.

Despite David Cameron’s pledge to preside over the “greenest government ever”, this has demonstrably not occurred. Back in July LondonLovesBusiness revealed 10 different ways the government has put the environment on the backburner.

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Readers' comments (1)

  • Anonymous

    IF Green Energy is profitable then no Gov investment needed.

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