The UK government announced on February 10th that it will provide short-term financial support for large biomass power plants. This means that Drax Group’s four biomass units will continue to receive subsidies after 2027, reported Biomass Magazine.
Earlier this year, the government said it was thinking about extending these subsidies for biomass power producers who are also developing technology to capture and store carbon emissions from their plants. After a public feedback period that ended in February, the government decided to move forward with the plan.
Current subsidies for biomass power are set to expire in 2027. The goal of extending them is to help these plants transition to using carbon capture technology and to ensure the UK has a reliable energy supply. Biomass power currently accounts for about 5% of the UK’s electricity.
The government explained that keeping these large biomass plants running is important for a stable electricity system. They argued that it would be difficult to replace the power these plants generate quickly and affordably. Continuing support, they said, would reduce the need for other, potentially more expensive, ways to ensure the UK has enough electricity.
The new subsidies will be less than what these plants currently receive and will be designed to prioritise energy security. The support will come in the form of a “contract for difference,” meaning the government will pay the difference between a set price and the actual market price of electricity. Only biomass plants that can export at least 100 megawatts of electricity will be eligible. They will also need to meet sustainability standards for their biomass fuel and meet a certain threshold for greenhouse gas emissions.
Drax has expressed its support for the government’s decision. “The government’s plan for biomass power is an investment in UK energy security, which will save consumers money and help achieve clean energy goals,” said Will Gardiner, CEO of Drax.
Drax said that all four of its biomass units will be eligible for the new subsidies, which will run from April 2027 to March 2031. Under the proposed agreement, Drax will sell a set amount of power annually and then adjust its generation based on electricity demand, using its flexibility to support the UK’s energy needs.
The UK Association for Renewable Energy and Clean Technology (UK REA) also welcomed the government’s announcement. “Supporting Drax and other large-scale biomass plants from 2027 is the right move,” said Samantha Smith, head of heat and biomass at the REA. “Sustainable biomass is recognised as crucial for reaching net zero emissions by many experts. It’s good to see the government acknowledge the important role this technology plays in providing a secure and affordable power system.”
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