Drax says may convert coal units to run on gas

LONDON, June 15 (Reuters) - British power producer Drax is assessing whether to convert its remaining coal-fired power units to run on gas instead so they can compete in the country's annual capacity auction, the company said on Thursday.

Drax has converted half of its Yorkshire coal plant, once Europe's most polluting coal-fired power station, to burn wood pellets but plans to switch the remaining units to biomass have stalled since the government changed renewable energy subsidies.

"One option is to repurpose the coal units to run on gas," said Andy Koss, chief executive of Drax's generation business, during a presentation to analysts.

The plans are in the early assessment stage but Drax Chief Executive Dorothy Thompson said the type of gas plant conversion being considered would mean the units would qualify to compete for 15-year contracts in Britain's annual capacity auction.

Drax is banking on the need for back-up electricity production capacity to complement solar plants and wind turbines and is forecasting a trebling in earnings by 2025.

It is already planning to build four modern open-cycle gas turbine (OCGT) plants, provided they obtain contracts in the capacity market auctions. (Reporting by Karolin Schaps; editing by David Clarke)