Drax Shares Plunge After U.K. Government Proposes Subsidy Change

Dec. 12 (Bloomberg) — Drax Group Plc, owner of the U.K.’s
largest coal-fired power station that’s switching to burn wood
pellets, plunged to its lowest since September 2012 after the
government proposed changes to biomass subsidies.

The U.K. today said it’s considering removing the so-called
“grandfathering” of subsidies paid to generators such as Drax
that are converting to burn biomass. That means the premium
payments they receive for their electricity won’t be guaranteed
for the lifetime of the project.

Drax, which has already converted two units at its plant in
Selby, North Yorkshire, to burn wood pellets, saw its shares
slump as much as 13 percent to 490.10 pence in London, the
biggest loss since April 23 and the lowest price since Sept. 10,
2012. They were trading at 505.50 pence at 9:16 a.m.

To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Alex Devine, Ana Monteiro

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