The British government’s decision to end the Climate Change Levy last week has thrown the future of a Yorkshire biomass power plant into doubt.
The axing of the tax break by Chancellor George Osborne (right) is to cost the renewable industry almost £1bn a year by 2020 and the Lynemouth power plant, which is set to be converted from coal to biomass, looks to be under threat.
RWE npower, which operates the 400MW power station through its Lynemouth Power Ltd subsidiary, said it would have to study ‘the budget announcement in closer detail’ before determining its strategy.
Management at neighbouring power plant Drx believe the change to the CCL could cost it up to £60m a year in lost revenues.
This conversion programme is already way behind schedule following a challenge by the European Commission (EC) over proposed UK Government subsidy payments, and the latest announcement has added to concerns these proposals may be axed.
RWE said its most pressing issue is the EC state aid rule decision, which is due by the autumn. The station will continue to operate as normal in the meantime.
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