DRAX has scrapped plans to build Europe's largest gas power plant in North Yorkshire.

The power giant which generates about six per cent of the country's energy needs has revealed that it will instead focus its future on renewable energy.

The decision to abandon the gas project will cost the company £13m, according to its annual financial reports which have just been released.

Drax Group secured permission for a combined cycle gas turbine (CCGT) plant in 2019 which attracted strong opposition from green groups.

Climate campaigners argued that the plan went against the UK's goal to be a world leader in cutting greenhouse gas emissions.

The FTSE-listed utility has confirmed it will abandon plans to build two CCGTs in place of two old coal burning units at the Drax site near Selby.

It intends to focus on plans for sustainable biomass generation - producing more electricity by burning wood chips, which it says is a carbon neutral renewable energy source because the trees absorb carbon dioxide before they emit carbon while burning in a power plant.

The news comes after the electricity generator sold off its only four operating gas plants to a subsidiary of oil trader Vitol last month. 

It will cease to burn coal at Drax, near Selby, next month.

Drax chief executive Will Gardiner used the company results for 2020 to reveal that it would not develop any new gas generation.

He said the energy giant would continue to assess options for the site.

The results said performance had been strong, though the company reported a £156m operating loss for 2020.

Mr Gardiner said: "Drax has supported its customers, communities and employees throughout the Covid-19 pandemic and I want to thank colleagues across the Group for their commitment and hard work over the last year. We have delivered strong results, a growing dividend for shareholders and excellent progress against our business strategy.

“Our focus is on renewable power. Our carbon intensity is one of the lowest of all European power generators. We aim to be carbon negative by 2030 and are continuing to make progress. We are announcing today that we will not develop new gas fired power at Drax. This builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations.

“The proposed acquisition of Pinnacle Renewable Energy will position Drax as the world’s leading sustainable biomass generation and supply business, paving the way for us to develop bioenergy with carbon capture and storage (BECCS) – taking us even further in our decarbonisation.”

The report said the 2021 outlook was 'targeting carbon negative' and 'progressing biomass strategy.

This involves:

  • No new gas generation at Drax Power Station, retain options for system support gas in next capacity auction
  • Completion of sale of existing gas generation (January 2021) and end of commercial coal (March 2021)
  • Proposed acquisition of Pinnacle Renewable Energy Inc. (Pinnacle) – supports long-term options for third-party supply, BECCS and biomass generation
  • BECCS – commencement of DCO planning process, potential FEED study and clarity on regional clusters