Drax Group, which owns and operates the 4 GW coal and biomass Drax power station in the UK, has decided to pull out of the White Rose carbon capture and storage project. This setback for the £1bn scheme has been brought about by Drax’s assessment that UK government green policy reversals have made it too risky to proceed.
Several "critical reversals" in government support for renewable energy had made "a severe impact on our profitability", said Peter Emery, the Drax board member chairing the group developing White Rose. Drax’s decision to abandon five years of planning for a CCS system next to its huge North Yorkshire power station is the most visible sign yet of the effect on investors of the UK government’s green energy subsidy cutbacks.
"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," Mr Emery told the Financial Times.
"The government has to make difficult decisions based on affordability and, in turn, so are we," he added. This was a reference to remarks by Amber Rudd, the energy secretary, who justified subsidy cuts on the grounds that they are needed to ‘protect hard-working British families’.

Drax has announced that it remains committed to fulfilling its current work on a CCS feasibility and technology development project (FEED), but once that is completed it would not be investing further and will withdraw as a partner of Capture Power Ltd, the development consortium made up of Drax, Alstom and BOC. Drax has also confirmed that it will continue to make the proposed site, which is owned by Drax, along with the infrastructure at the power plant, available for the project to be built.

In response Capture Power confirmed its commitment to the delivery of the project. Leigh Hackett, its CEO, commented: "Drax’s decision not to invest further in the project is disappointing, but we are keen to confirm that Capture Power remains committed to delivering the White Rose CCS project. We can also confirm that we continue to work constructively with Drax on land, site services and shared infrastructure aspects to support the Project’s delivery.
We are now well over halfway through the FEED study and we are progressing towards receiving development consent. The final investment decision for White Rose will be dependent on successful outcomes of the FEED study, funding arrangements and the proposed Contract for Difference market mechanism designed specifically to encourage investment in new, low carbon generation. The team at Capture Power is working hard to put the UK on the CCS map through delivering this groundbreaking project."

Capture Power was set up to deliver, in association with National Grid, the world’s first commercial scale, full chain, carbon capture and storage coal-fired power plant, and is looking at the potential to capture up to 90% of carbon emissions from a new coal fired power station and safely store them beneath the North Sea. In July 2014 the project was promised up to €300m as part of the EU’s NER300 funding programme.
The future of White Rose depends heavily on getting some of the £1bn the government has been offering for carbon capture ventures in a competition dating back to 2007. The contest has already collapsed once, in 2011, when all but one bidder pulled out, and the remaining consortium, led by Scottish Power, could not agree funding terms with the government.
The White Rose consortium is one of two groups currently in the race. The other is Peterhead, proposed by a consortium that includes Shell, which plans to capture carbon from a gas power plant in Scotland and store it in depleted oil reservoirs below the North Sea.