Shares in the UK’s biggest coal-fired power station, Drax (LSE: DRX), tumbled by 13% last week. They had been quite popular up until then.
Investors seemed to like the company’s plans to convert three of its six power generating units from burning coal to biomass products, such as wood pellets. With lots of old coal power stations closing soon, Drax is well placed to make more money as Britain’s generating capacity becomes scarcer.
It was assumed that these three units would all qualify for a subsidy that would guarantee them a selling price of £105 per megawatt hour [...]
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