Drax pauses energy market bids after UK legal action

Power generator Drax on Monday said it would not participate in future capacity market auctions until the outcome of a judicial review of the UK government's decision to approve a controversial gas power plant in Yorkshire.

The company said it had provisionally secured agreements to provide a total of 2,562MW of capacity from its existing gas, pumped storage and hydro assets for the delivery from October 2022 to September 2023, at a price of £6.44/kW and worth £15m in that period.

The next capacity market auction will take place in March.

Drax did not accept agreements for its two coal units at its Selby power station or the small combined cycle gas turbine (CCGT) at Blackburn Mill and would now assess options for these assets, alongside discussions with National Grid, Ofgem and the government.

“A new-build CCGT at Damhead Creek and four new-build open cycle gas turbine projects participated in the auction but exited above the clearing price and did not accept agreements,” Drax said in a statement.

Drax on Friday had to postpone plans to build a large gas power plant after environmental lobby group ClientEarth started a challenge in the High Court against the project.

ClientEarth challenged a decision to approve the scheme by Energy Secretary Andrea Leadsom, against advice by the Planning Inspectorate to withhold consent because it would run contrary to the government's policy on cutting greenhouse gases.

Drax said it would only proceed with the plant if it won a favourable capacity market contract. The auctions are designed to make sure there is enough electricity supply through the winter.