The UK government is poised to approve controversial plans for Drax Group (LSE: DRX) to build two massive carbon capture and storage (CCS) plants at its North Yorkshire power station, according to a Telegraph report.
Shares in the renewable energy giant closed 6.4% higher on Monday at 521p after the report said Energy Secretary Claire Coutinho will likely give the green light this week despite environmental opposition.
If approved, the multibillion-pound project would allow Drax to capture and store nearly all carbon emissions from its four generating units – once among the UK’s dirtiest coal plants and now converted to biomass.
Campaigners angrily oppose the CCS proposal, arguing taxpayer subsidies should not support a power station that burns imported wood pellets. But the government aims to back CCS to meet legally binding net zero targets.
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The Telegraph said Coutinho may also announce an extension to consumer-funded subsidies paying Drax £617 million last year. The system ends in 2027; an extension into the 2030s would secure Drax’s operations for years.
Just before Christmas, Drax welcomed a government update reaffirming plans to deploy at least 5 million tonnes yearly of greenhouse gas removals by 2030, rising to 81 million tonnes by 2050.
