1st Dec 2015 13:08
LONDON (Alliance News) - Shares in power station operator Drax Group PLC surged on Tuesday afternoon after the European Union gave regulatory approval to the UK government on its plan to finance the conversion of a coal-fired plant in Lynemouth to biomass.
The European Commission said a nine-month investigation it conducted found the Lynemouth project was in line with the EU's environmental and energy goals, meaning state support could be approved.
Lynemouth Power, the operator of the plant, is a subsidiary of RWE Supply and Trading, a unit of German energy giant RWE AG.
There are currently eight projects in the UK proposed to convert coal-fired stations into biomass plants, including Drax's plant in North Yorkshire. The EU has yet to rule on the Drax plan, but the ruling on Tuesday is likely to generate optimism that state support for the conversion will be approved.
Drax shares were up 12% early afternoon on Tuesday to 251.90 pence, the best performer in the FTSE 250.
By Sam Unsted; [email protected]; @SamUAtAlliance
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