The regulatory authority said the move will not unduly distort competition in the single market.
Drax can now complete upgrading the third of its six units to run on wood pellets after commencing the work in July 2015, at a cost of £650m.
The Drax power station generates enough renewable electricity to power three million homes.
In the initial six months of this year, 20% of the country’s renewable power was provided by Drax.
The UK has set out proposals to stop coal-fired generation by 2025 as part of its plan to stimulate more clean energy generation. The plant will be supplied about 2.4m tonnes of with wood pellets per year from the US and South America.
The support for the project will be extended till 2027 and as per the UK’s estimates, the biomass unit can generate about 3.6 terrawatt hours (TWh) of electricity per year.
Drax Power CEO Andy Koss said: “Drax now leads the world in biomass technology – three million households are powered with renewable energy generated by Drax and we’re the largest carbon saving project in Europe.
“We have demonstrated how to reinvent a coal-fired power station, using an existing asset, so there are no hidden costs to the Grid and it is quick to achieve. This is a testament to the expertise and ingenuity of our engineering team and everyone at the power station.”
“The energy challenge facing the UK is how to replace the contribution currently made by coal. Biomass technology is proven, ready to go and ideally placed to help the country transform to a low carbon future with reliable, secure and affordable renewable power.”
Image: Biomass domes at Drax Power Station. Photo: Courtesy of Drax Group plc.
