Drax shares tumble after Britain rejects carbon-capture project

Updates with background

March 30 (Reuters) – Shares of British power generator Drax DRX.L fell 10% on Thursday after the government turned down its carbon-capture project for the country’s Track-1 programme.

The project was not selected for Track-1, but the government will engage further with the project following an assessment outcome, the Department for Energy Security & Net Zero said.

Britain laid out plans on Thursday to boost its energy security and independence through investment in efforts to move towards cleaner, more affordable energy sources.

Last week, Drax said it was pausing its planned UK investment of 2 billion pounds ($2.45 billion) in bioenergy with carbon capture and storage (BECCS) as it awaited clarity on UK funding.

An existing subsidy scheme for biomass plants, which provide about 6% of Britain’s electricity, runs out in 2027, which a Drax spokesperson said could make them unviable.

The company was not immediately available for comment when contacted by Reuters on Thursday.

(Reporting by Nora Buli in Oslo and Radhika Anilkumar in Bengaluru; Editing by Subhranshu Sahu and Clarence Fernandez)

((Radhika.Anilkumar@thomsonreuters.com;))

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