The ending of climate change tax exemptions in the UK has caused a 28% drop in share prices for Drax Power Station, North Yorkshire, which had been making efforts in shifting to renewables and replacing amounts of coal burned with wood pellets.
The initiative is estimated to save the government £450m in the current financial year and £900m by 2020, yet Drax has claimed that it will slash its own revenues by almost £30m this year and £60m in 2016 for the 3,960MW facility.
Drax chief executive Dorothy Thompson was quoted by The Financial Times as saying: "We are surprised and disappointed at this retrospective change to a support regime, which has been in place since 2001 specifically to encourage green energy and support renewable investment decisions."
Justifying the cut, UK Chancellor George Osborne said: "Now we have a long-term framework for investment in renewable energy in place, we will remove the outdated climate change levy exemption for renewable electricity that has seen taxpayer money benefiting electricity generation abroad."
Renewable energy investors and developers have opposed the decision to remove the levy, claiming that it clashed with the UK Government’s previously announced strategy to support climate change action.
RenewableUK’s director of policy Gordon Edge said: "Yet again, the government is moving the goalposts, pushing some marginal projects from profit into loss. It’s another example of this government’s unfair, illogical and obsessive attacks on renewables."
Image: Drax Power Station in North Yorkshire, UK. Photo: courtesy of Paul Glazzard / Wikipedia.