Drax Power was planning to build a dedicated power plant at the site of it's existing Drax coal fired plant, adding an additional 290 megawatt capacity to it's output - burning exclusively biomass fuels.

The high cost of transporting the required fuel and low levels of 'regularory support' were cited as reasons for the abandonment of the plans.

The question of support for biomass projects was raised with the Prime Minister in Parliament only last month by Selby MP, Nigel Adams, as reported on Selby Online.

But despite the set back for it's Selby plans, Drax says that it still expects that in the long run it will become a 'predominantly renewable' electricity generator.

For the time being, it plans to do this by using a technique known as co-firing, where biomass is burned along side traditional fossil fuels at it's existing plans.

Investing £50 million in the technology, Drax will generate upto 20% of it's electricity this way during 2012 as it increases capacity from the 12.5% generated in 2010.

Commenting in the publication of today's results Dorothy Thompson, Chief Executive at Drax, said, "In 2011, as part of a review of renewables support, Government announced its intention to incentivise from 2013 the most cost effective renewable technologies, including increased support for electricity fuelled by sustainable biomass in existing coal-fired power stations. With a moderate uplift in the proposed support level we could, over time, maximise the potential for producing this low cost renewable electricity.

"Drax is ready to transform itself into a predominantly renewable generator, but to do so we need appropriate regulatory support, and to that end we look forward to the timely conclusion of the Government’s current review."