UK energy provider Drax, whose North Yorkshire power station is converting its units from coal to biomass, has lost a Court of Appeal battle against the Government over subsidies.
The Department of Energy and Climate Change (Decc) told Drax in April that Unit 3 did not qualify for an "investment contract" - a new and higher subsidy for the generation of renewable energy.
Decc said it did not meet the key criterion. In July the High Court overturned the Decc decision on the basis that it was one "no reasonable decision-maker could have made".
Mrs Justice Andrews declared the unit was eligible for an investment contract as the key criterion was satisfied.
The judge ordered Decc to "promptly" reconsider its decision in the light of her judgment.
But now three appeal judges - Lord Justice Laws, Lord Justice Richards and Lady Justice Gloster - have allowed a Government appeal and set aside the High Court decision.
In the lead judgment, Lord Justice Richards said Decc had taken a "reasonable approach" to the issues raised and it was "not an appropriate case for interference by the court".
A carbon capture scheme running through Yorkshire has been given a boost with around €300 million in funding from the European Union.
The White Rose CCS Project will build a new plant beside the existing Drax Power Station site which will burn coal with the potential to co-fire sustainable biomass and meet the equivalent power needs of over 630,000 homes.
From the start, 90 per cent of the carbon dioxide produced by the new plant will be captured and piped off shore beneath the North Sea seabed.
Leigh Hackett, CEO of Capture Power, who run the project, said it "represents another significant milestone for us in our development programme and an important potential source of funding for the Project, as well as providing a strong signal for CCS in Europe."
There are calls for a decision on funding for a pilot scheme on carbon capture at Drax Power Station to be fast tracked. A committee of MPs says the government should make a final decision by early next year following a decade of delays.
The Government has announced a major financial boost for two offshore wind companies in our region.
The two projects, one in The Wash off north Norfolk and the other off the coast at Hornsea will benefit from new investment contracts, which could lead to hundreds of new jobs.
They are two of eight renewable power projects which have been given support to help meet green energy targets.
Energy Secretary, Ed Davey, says now is the best time to invest in such projects:
The UK's biggest power plant, Drax, has announced it will sue the government over an apparent u-turn on its funding for green energy conversion.
The Selby-based powerstation has already switched to burning wood pellets in one its coal-powered units and was provisionally told in December that it would be subsidised to convert another two to biomass as well.
Drax says both units were also ranked equal first of all the qualifying projects and deemed affordable.
But the firm has been told by the government that the second of those units will no longer get an Investment Contract under the 'Contracts for Difference' mechanism, so it's taking legal action.
Dorothy Thompson, Chief Executive of Drax, said:
“Whilst we are pleased to have been offered an Investment Contract for our third unit conversion, we are disappointed by today’s decision on the ineligibility of our second unit.
"Nothing has changed, as far as our plans are concerned, between being deemed eligible in December and now. We have, therefore, commenced legal proceedings to challenge the decision."
The Department for Energy and Climate change today refused to comment.
Two Yorkshire projects are among eight approved by the Government creating a total of 8,500 jobs.
Drax Power Station will receive investment for biomass conversion, while off shore wind farms at Hornsea will contribute to the provision of clean energy to three million homes by 2020.
All eight are expected to generate £12 billion in private sector investment.
The giant Drax station in North Yorkshire has taken another significant step towards a cleaner future after Energy Secretary Ed Davey announced that the plant will eventually switch from the use of coal to wood.
When it's complete it could provide biomass-fuelled power to more than a million homes, making it one of the biggest renewable plants in the world. Emma Wilkinson reports.
Police investigating a crash in which a 16-year-old boy was killed want to trace the driver of small white car which was also at the scene. The boy was a front seat passenger in a red Fiat which collided head on with a Ford Focus on the Drax link road near Rawcliffe in East Yorkshire.
The 25 year old driver along with a father and his six-year-old son travelling in the Ford Focus are being treated for serious injuries. Humberside Police are seeking witnesses to the collision or anyone who saw the small white car which was travelling infront of the red Fiat prior to the crash.
Police say they are still hoping witnesses will come forward to a fatal accident near Drax power station in East Yorkshire, in which a 16-year-old boy died. Flowers have now been laid at the scene.
A 16-year-old boy has died in a car accident near Drax power station in East Yorkshire. It happened on Friday evening on the A645 Drax Link Road between the power station and Rawcliffe Road. The teenager was a front seat passenger in a red Fiat Punto which collided with grey Ford Focus.
He was pronounced dead at the scene. The driver of the Punto, a 25-year-old man from Goole, was taken to Leeds Royal Infirmary with serious injuries. The driver of the Ford Focus, a 40-year-old local man, and his six-year-old son were both taken to Doncaster Hospital with serious injuries.
Police are seeking witnesses and are particularly keen to trace the driver of a small white car which was travelling in front of the red Fiat, prior to the collision.