UK power company Drax has canceled a 290-MW biomass power plant proposed for construction in North Yorkshire, citing high costs for transporting fuel to the £1.4 billion ($2.19 billion) inland plant and a lack of financial and regulatory support from the UK government.

The company had planned to build the dedicated biomass plant with Siemens Project Ventures on its Selby site. That site also houses the 3,960-MW Drax Power Station, the largest coal-fired power station in the UK that is also capable of co-firing biomass and petcoke.

The canceled plant was expected to burn a wide variety of biomass fuels, including purpose-grown energy crops, forestry residues, agricultural by-products as well as recovered timber and paper. "The development planned for the Drax power station site has proved the most [problematic] for a number of reasons, including its inland location which increases logistics costs,” Drax CEO Dorothy Thompson said.

Thompson on Tuesday also expressed “disappointment with the proposed level of support” for biomass generation, saying that though Drax was confident in its technical capability to become predominantly biomass fueled, the government’s lack of support made “the investment case for the independent [biomass] generators highly challenging.” Given the significant financial liability that “we would face were we to delay our investment decision until we have certainty over the final support level for dedicated biomass, we have decided to cancel the project,” she said.

While the UK Department of Energy and Climate Change last October proposed to increase subsidies for co-firing—mixing biomass with coal—it also decided to slash support for standalone biomass plants by 7% starting in April 2016. A final review of the government’s Renewables Obligation Consultation—the main financial support plan for renewable electricity in the UK—is expected this spring.

Drax is currently implementing a program to produce 12.5% of its power generation from co-firing at its Drax coal-fired power plant. Drax, meanwhile, will also continue considering options for two other planned biomass plants at South Killingholme in North Lincolnshire and another unspecified site.

“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,” Thompson said.

Sources: POWERnews, Drax, DECC