Downing Street today defended shovelling more taxpayers’ cash into the controversial Drax wood-burning power station.
New subsidies have been announced for the North Yorkshire biomass power plant from 2027, when existing payments are due to run out, until 2031.
This is despite environmental groups and campaigners having called for an end to Government support for burning biomass.
Drax, which produces around 5 per cent of the UK’s electricity, would not be financially viable without the billions of pounds it has received in subsidies.
It has been accused of burning wood from some of the world’s most precious forests, although it has said it is confident the biomass used is sustainable and legally harvested.
Last summer, Drax was ordered to pay a £25million penalty after a regulator found it had failed to report accurate data on the type of material it burned.
The company said there was ‘no evidence’ it had ‘deliberately misreported’ data.
Supporters of biomass say it can create carbon-neutral energy because trees and other plants first absorb carbon, then are burnt and release the same carbon back into the atmosphere.
But critics say this assumes the companies only use sustainable wood in their boilers.
Downing Street has defended shovelling more taxpayers’ cash into the controversial Drax wood-burning power station
New subsidies have been announced for the North Yorkshire biomass power plant from 2027, when existing payments are due to run out, until 2031
Drax has been accused of burning wood from some of the world’s most precious forests, although it has said it is confident the biomass used is sustainable and legally harvested
The Government announced, from 2027, a new support scheme will come into effect which reduces electricity generation, halves subsidies and imposes new sustainability requirements.
Energy Minister Michael Shanks said Drax would switch from being a baseload electricity generator – running about two-thirds of the time – to only operating as ‘dispatchable power’ when it is really needed, and allowing wind and solar to be favoured when they are available.
Stricter sustainability requirements are also being brought in, with ‘substantial penalties on Drax if these criteria are not met’, the Government added.
The new arrangements will halve the subsidies paid to Drax and include a windfall mechanism that means that 30 per cent to 60 per cent of profits will be returned to consumers if they go above expected limits.
Biomass is the lowest cost option in the short term, but without extra technology to capture carbon emissions from burning wood, it is not a long-term solution, ministers said.
Asked about the new subsidies for Drax, Sir Keir Starmer’s official spokesman: ‘This agreement will halve the amount of support for Drax, it will save money on people’s energy bills, it will contribute to energy security.
‘It includes a new windfall mechanism to recover excess profits and ensure fair prices.
‘We’ve also introduced tough new measures to ensure that Drax will have to use 100 per cent sustainably-sourced biomass, up from 70 per cent now.
‘Not a penny of subsidy will be paid for non-compliant biomass and there will be substantial penalties for any failure to meet this strict criteria, which will protect both consumers and the environment.’
Asked if the halving of subsidies suggested the Government is planning to phase-out the use of Drax, the PM’s spokesman added: ‘The UK’s Committee for Climate Change has recognised the role that biomass can play in decarbonising economies and meeting Net Zero, provided that policies are in place to mitigate the use of unsustainable biomass.
‘In terms of this specific agreement, it’s a time-limited agreement, it’s designed so biomass is only used as a back-up when absolutely needed – ensuring consumers don’t pay for unnecessary power generation.
‘But, without it, large-scale biomass plants would likely stop generating electricity that would remove a key source of low-carbon dispatchable power.’
Rick Parfett, senior policy adviser on climate at WWF-UK, said: ‘Forests are crucial to preventing climate breakdown by storing carbon, so burning trees for energy will never make sense.
‘The Government’s statement that this isn’t a long-term solution and their commitment to putting in place credible low-carbon alternatives are welcome.
‘But it’s deeply concerning to see taxpayer money continuing to flow to the UK’s single largest polluter when we know we can decarbonise the power sector without it.’
Drax Group chief executive Will Gardiner said the new framework was an ‘investment in UK energy security, which will result in a net saving for consumers’ and support the delivery of the Government’s clean power by 2030 goal.
He said analysis indicated it would result in a £1.6 to £3.1billion reduction in electricity system costs, versus the construction of new fossil fuel power plants – which the Government said would also carry significant risks.
‘Under this proposed agreement, Drax can step in to increase generation when there is not enough electricity, helping to avoid the need to burn more gas or import power from Europe, and when there is too much electricity on the UK grid, Drax can turn down and help to balance the system,’ Mr Gardiner said.
‘The size, flexibility and location of the power station makes it important for UK energy security and the proposed agreement helps protect the jobs and skills of today and the future, creating options for billions of pounds of investment in growth across Britain, including the development of large-scale carbon removals and data centres.’
