European commission approves Drax biomass subsidy

A third unit at Drax's coal power station will switch to burning wood pellets after commission's state aid investigation approves financial support

The share price of Britain's biggest power station operator has jumped to a five-month high after the European commission approved subsidies for its conversion to burn wood pellets instead of coal.

Drax was awarded a renewable energy subsidy contract by the government in 2014 to switch the third unit of its coal power station in North Yorkshire over to biomass. That prompted a state-aid investigation by the commission, which was concerned the estimates of the plant's performance were too generous and Drax would be overcompensated.