The UK bio-energy sector has been dealt a “potentially significant blow” with energy giant Drax axing plans to build a biomass plant in Yorkshire.
The company said there was not enough regulatory support for biomass to press ahead with building a 290MW plant on its Selby site.
Ernst & Young director James Barrett-Miles said the move represented “a potentially significant blow to the development of the UK bio-energy sector and the job market, which would have benefitted from new employment opportunities”.
He added: “It also creates another obstacle for the Government and its ambitious 2020 mandatory renewable energy targets.
“Although the Government has shown some positive sentiment towards the biomass sector recently, as seen by the improved subsidy levels for co-firing and the introduction of the Renewable Heat Incentive, much more needs to be done.”
Barrett-Miles called for an increase in the level of incentive for biomass energy through the Renewables Obligation Certificates scheme.
The government is consulting on proposed new bandings for Renewables Obligation Certificates which would see support for dedicated biomass plants drop by 2016. Drax said last year that plans to build a number of biomass-fired plants would be put into question as a result.
But the company this week said it was still focused on transforming itself into a predominantly biomass-fuelled generator.
Drax production director Peter Emery said: “Our decision to invest £50m this year in our existing biomass co-firing facility at Drax means there will be no loss of increased renewable power generation for Yorkshire.
“Our focus remains on biomass and we are confident that we have the technical capability to transform Drax into a predominantly biomass-fuelled generator.
“To achieve this will require significant investment and that decision will be taken once we have clarity and certainty over the future support levels.”