Drax Expects Renewable Power Contract After Court Ruling

Drax Group Plc said the government plans to award it a second contract for guaranteed power prices after the High Court ruled ministers must reconsider an earlier decision to grant the generator just one rather than two deals.

The Department of Energy and Climate Change in December shortlisted two coal-to-biomass conversion projects by Drax to receive early contracts-for-difference that guarantee the generator a fixed power price. In April it said only one was eligible, despite no changes to Drax’s plans. Drax asked the courts to intervene. A High Court Judge said nine days ago the DECC decision must be quashed.

“DECC has today informed Drax that following the recent High Court judgment, it has, as directed by the court, now completed a reconsideration of the application,” Drax said today in a Regulatory News Service statement. “Following that reconsideration, DECC now intends to award Drax an investment contract for this unit.”

The energy department has told Drax that it has appealed the High Court ruling, the generator said. “Any award of an investment contract for the second unit conversion will therefore be dependent on the final conclusion of the legal challenge and remains subject to EU State Aid clearance,” the department said.

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