The European Commission is investigating whether the UK’s early contract for difference (CFD) subsidy for Drax’s 645MW unit 1 coal-to-biomass conversion is in line with EU state aid rules. Drax was awarded an inflation-linked ￡105/MWh ($154/ MWh) early CFD subsidy in April 2014 to convert its Selby power plant but has been waiting for state aid approval from the commission before converting to 100pc biomass. The unit is currently co-firing 85pc biomass under the existing renewable obligation, after it was converted in July.
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