DRAX Power has said it can not move ahead with plans to build new biomass plants with Siemens Project Ventures because of lack of clarity from the Government.

The power station is planning to build three 290MW biomass-fired renewable energy plants. It has planned one for a site at the south west edge of the Port of Immingham and another on land adjacent to the existing Drax Power Station.

While the business originally expected to start construction by the end of 2010, it has said in its half year results to June 30 that this is no longer the case.

Drax has been lobbying the government for “grandfathering”, which would see the government provide support for dedicated biomass plants over their lifetime.

The Government committed to providing 20 years of grandfathering support in its Annual Energy Statement on 27 July, but the rate of support is revised every four years, with new rates coming into effect in April 2013.

Chief executive Dorothy Thompson said their plants would not be commissioned before this date so they would be subject to the new rates.

“There is therefore, no clarity today on the level of ROC support that these plants will receive. We do not believe it is possible to move forward with these investments in the absence of this clarity. We are urging the Government to address this particular issue early in the next banding review and we hope for an early conclusion.

“The lack of regulatory clarity over ROC band support including grandfathering means it has not been possible to progress some key areas of the project development. Once we have this clarity, we will work quickly to reduce the impact of this delay on the schedule and to prove the investment case,” she said.

The company increased revenue to £780.6 million in the six months ended June 30, 2010, compared to £706.9 million in 2009, and increased pre-tax profit to £132.2 million, from £33.8 million in 2009.

Chairman Charles Berry said the improvement comes from action taken to accelerate power sales and take advantage of higher margins and announced a dividend of 14.1 pence per share, equivalent to about £51 million