Power generator Drax Group has abandoned plans for a gas-fired power station at its Yorkshire base as it stakes its future on renewable energy.
The Selby firm, which generates around 6 per cent of the country's energy needs, had been given permission for a combined cycle gas turbine (CCGT) plant in 2019.
But speculation had been swirling that it would abandon the 3.6GW scheme after it sold other gas-fired power plants at the end of 2020.
Now Drax chief executive Will Gardiner has used the release of company results for 2020 to announce that it will not develop any new gas generation.
Mr Gardiner said Drax would “continue to assess options for the site” after opting against the gas plant. It could see a further expansion of biomass - a £750 million fuel switch from coal completed over the past decade.
In the results, Drax hailed a “strong performance” in 2020 despite seeing revenues fall and losses widen.
Mr Gardiner said: "We have delivered strong results, a growing dividend for shareholders and excellent progress against our business strategy.
"Our focus is on renewable power. Our carbon intensity is one of the lowest of all European power generators. We aim to be carbon negative by 2030 and are continuing to make progress.
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“We are announcing today that we will not develop new gas fired power at Drax. This builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations.
"The proposed acquisition of Pinnacle Renewable Energy will position Drax as the world's leading sustainable biomass generation and supply business, paving the way for us to develop bioenergy with carbon capture and storage (BECCS) - taking us even further in our decarbonisation."
Launched as a concept in 2017, the CCGT plant, which would have seen the conversion of two coal-fired units at Selby, had proved controversial since being consented by then Business and Energy Secretary Andrea Leadsom in 2019. A first phase of 1.8GW had been anticipated by 2023, with 800 construction jobs envisaged.
An environmental group last year took a court case against the plans, though the challenge was dismissed.
The company's results showed that revenues for 2020 stood at £4.25bn, down from £4.47bn a year earlier. The company's operating loss widened from £48m in 2019 to £156m.
Drax said it had taken a £60m hit from the Covid-19 pandemic, but said its adjusted EBITDA increased to £412m and it is proposing a final dividend of 10.3p per share.
Earlier this month Drax announced the acquisition of Canadian wood pellet company Pinnacle as part of its switch towards biomass. It also completed the sale of the gas portfolio to Immingham-based VPI.