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Drax confident as biomass conversion gathers pace

UK power generating company Drax has highlighted the positive moves as it converts its coal-fired plant to biomass.

The conversion comes in response to rising coal prices and government subsidies backing renewable energy sources.

The company reveals that the first of its six units at the Yorkshire-based facility will be converted to biomass in April, with a second planned to be ready next year.

‘With government support and our financing secured, both in the second half of 2012, we are on track to hit both those conversion targets,’ says Drax CEO Dorothy Thompson.

The total capital cost for the biomass transformation is believed to be within a range of £650 - £700 million (€750 - €808 million) including delivery, storage and distribution infrastructure for biomass fuel and potential investment to support compliance with the Industrial Emissions Directive.

"We will be investing significant capital over these two years as we transform the business,’ Thompson adds. ‘EBITDA in this period will be impacted adversely by the increasing costs of carbon.  However, as we move beyond this investment phase and replace substantial quantities of coal with sustainable biomass, we are confident that we will deliver attractive returns for our shareholders, who have provided us with strong support.’