ES in Drax jumped yesterday, on news that the UK’s largest power plant operator had won a legal challenge against the government’s decision to reject one of its units for a new type of subsidy.
The FTSE 250 firm, which operates a coal-fired power station in Yorkshire, expected to be eligible for a new renewable support framework so that it could convert its units from coal to sustainable biomass. But in April one of its units was rejected with little explanation, according to the company, sending its shares down over 13 per cent.
The High Court has now ruled in favour of Drax, overturning the Department of Energy and Climate Change’s decision, although the department has been granted leave to appeal.
Shares surged over seven per cent in early trading and closed 4.4 per cent higher at 710p.