DRAX will not bid for capacity market contracts for its proposed new gas power plant in north Yorkshire until the outcome of a legal challenge against the project is known.

The National Grid uses capacity market contracts to ensure there will be sufficient energy on the grid to offset periods of stress caused by the UK's increasing reliance on wind power, which can be unreliable.

Participants bid for these contracts four years ahead of delivery, with the next auction due in March. In a statement issued yesterday, Drax said it "does not intend to take a capacity market agreement in the forthcoming auction".

The energy company said that it would "now assess options for these assets".

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