12th Oct 2022 09:06
(Alliance News) - Yorkshire-based power generation firm Drax Group PLC on Wednesday said it will work with the UK government on its Energy Prices Bill before the measures are put in place in 2023.
On Wednesday, the UK government introduced the Energy Prices Bill, which could see renewable energy generators and nuclear power plants have revenues capped under a new plan to ensure companies are not benefiting from record-high energy prices.
Without releasing much detail, the government said it would try to break the link between high gas prices and the amount made by electricity producers.
The government explained that the price of gas decides the price of electricity, so as gas prices soared over the last year, many of Britain's wind farms and solar farms were paid a lot more than normal for their products, even though costs had not increased proportionally.
The government said it planned to introduce a "cost-plus revenue limit", but provided little detail about how this would work.
Drax said it plans to work with the government and the wider industry on the detail of the proposal.
Chief Executive Will Gardiner said: "The government's statement recognises the unique role that biomass plays in the UK energy system and its higher input costs. We will continue to engage with the government on the specific details of the legislation as it continues to be developed.
"Drax is the UK's largest source of renewable electricity by output and our sustainable biomass provides enough renewable electricity for four million households, playing a critical role in keeping the lights on - whatever the weather. We plan to invest GBP3 billion in our UK carbon removal, renewable power, system support and supply chain projects in the 2020s, demonstrating our commitment to UK energy security and net zero."
The plan comes weeks after the government's GBP2,500 "energy price guarantee" in England, Scotland and Wales.
Shares in Drax were down 0.4% at 522.40 pence each in London on Wednesday morning.
By Sophie Rose; [email protected]
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