Wednesday, 25 July 2012

Drax Plunges After U.K. Cuts Biomass Power Support


The U.K. government today published proposals for so-called renewable obligation certificates, or ROCs, a system to reward generators for switching to low-carbon power. Biomass generation, burning wood and other plant matter, will get fewer certificates than initially proposed. Drax plans to convert its plants to burn a proportion of biomass fuel.

“The proposed level of ROCs for biomass raise uncertainty as to whether Drax would proceed with its investment plans to partly covert the power plant to burn more biomass,” Goldman Sachs Group Inc. analysts said in a note today.

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