Power firm Drax is to pull out of future investment in a carbon capture and storage (CCS) demonstrator project, it has announced.
The company said it would withdraw as a partner of Capture Power, the developer of the White Rose project to build a stand-alone, oxyfuel demonstration CCS project of up to 448MWe gross output at Drax’s site at Selby, North Yorkshire.
It blamed the decision on the current financial and regulatory environment.
A two-year feasibility project by the Capture Power partnership – made up of Drax, Alstom and BOC - 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.
Drax confirmed that when this stage completed in the next year, it would cease to commit to further investment, but will continue to make its site and infrastructure available for the project.
Drax group operations director Pete Emery said: “We remain fully committed to completing what we’ve signed up to – the completion of a study into the feasibility and development of world leading technology that could result in dramatic reductions in carbon emissions produced by power stations and heavy industry.
“We are confident the technology we have developed has real potential, but have reluctantly taken a decision not to invest any further in the development of this project. The decision is based purely on a drastically different financial and regulatory environment and we must put the interests of the business and our shareholders first.”
Capture Power chief executive Leigh Hackett said: “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.”