Plan to extend Drax biomass subsidy sparks backlash

Politicians, environmental groups and climate campaigners have slammed the government for considering an extension to biomass subsidies at Drax Power Station.

A government consultation moots a bridging support mechanism for large-scale biomass generators, including Drax Power Station, as they transition from the end of their current renewable schemes in 2027 to bioenergy with carbon capture and storage (BECCS).

The consultation sets out four possible funding models, including two variations of a Contracts for Difference (CfD) model.

As reported in December last year, Drax claims that the mechanism is needed to “provide multi-year certainty allowing Drax to secure long-term biomass supplies and continue to support energy security via flexible and reliable renewable biomass operations in advance of BECCS”.

The consultation comes just days after energy secretary Claire Coutinho granted planning permission for BECCS operations at Drax Power Station.

In its consultation document, the government states that an extension of biomass subsidies may be necessary to ensure the UK has sufficient energy generation and capacity.

It adds: “Biomass as a generation technology is typically subject to relatively high fuel prices. […] In the absence of support, it is in most scenarios unlikely that large scale biomass plants would be incentivised to generate.

“This would lead to the potential retirement of the plants and loss of the associated fuel supply chains and logistics.

“Without these generators the UK could lose out on the optionality of having significant volumes of negative emissions capacity through power BECCS.

“Given that large-scale generators make up a significant proportion of the UK’s solid fuel biomass generation capacity (7% of the UK’s total electricity generation) this would also represent a significant reduction in both generation and capacity.

“Losing this capacity from the network permanently would likely require the Capacity Market to procure more capacity to maintain security of supply. This could place an upward pressure on Capacity Market prices.”

However, the consultation announcement faced a stiff backlash just hours after it was launched.

Conservative MP and Father of the House, Sir Peter Bottomley, criticised the decision and said those who “claim biomass at-scale can be ‘renewable’ are ignorant at best, fraudulent at worst”.

Fellow Tory MP Pauline Latham also expressed her “disappointment” in the government, while Labour MP Alex Sobel said that the subsidy should not be offered until Drax has delivered CCUS and proven it to be commercially viable.

Wera Hobhouse, Liberal Democrat MP and energy spokesperson, added: “Drax receives millions of taxpayers money every day despite providing no progress to our climate goals or driving down bills. It is absurd that it is still dressed up as an energy solution for the future. Our focus must be on rapidly scaling up renewables and driving down our emissions and families’ bills’.”

While Tommy Shepard of the SNP said: “Any attempt by the UK government to extend the current subsidy regime would be a step in the wrong direction, prioritising big business profit over the planet. It’s time to end these wasteful subsidies.”

Other critics include senior figures at the RSPB, Cut Carbon Not Forests, the Natural Resources Defense Council and Mighty Earth.

Alex Mackaness, senior policy officer at RSPB, said: “At a time when the UK government is failing in its efforts to scale truly low-carbon renewable solutions like wind and solar, it is instead considering throwing vast sums of public money at a form of energy generation that emits huge volumes of greenhouse gases and can be harmful to nature.

“Even the government’s own climate advisors have underlined subsidies for burning biomass for electricity should end when the current round expires in 2027. It would be madness to ignore this.”

Responding to the criticism, a Department for Energy Security and Net Zero spokesperson said: “No decisions have been taken and the government is focussed on protecting people’s bills and any potential support would be subject to a rigorous value for money assessment – ensuring that any tax and bill payer money is spent wisely.”

Drax Group chief executive Will Gardiner described the consultation as a “welcome step forward” to ensuring BECCS operations, while Energy UK chief executive Emma Pinchbeck described it as “very good news”.

Pinchbeck added: “BECCS will play an important role in further reducing emissions and reaching the goal of a net zero power system. Drax Power Station is the largest provider of renewable electricity in the country, fitting carbon capture technology to it could remove millions of tonnes of carbon dioxide every year and ensure it continues to play an important part in supporting the country’s energy security.

“As well as providing an economic boost to the area, the UK can also benefit from taking a leading role in the development and expansion of carbon capture technology which will be crucial to decarbonisation efforts right across the world.”

In August 2023, the UK government published a Biomass Strategy which set out its position on the use of biomass in the UK’s plans for delivering net zero.

The Biomass Strategy outlined the potential “extraordinary” role which biomass can play across the economy in power, heating and transport, including a priority role for BECCS, which is seen as critical for meeting net zero plans due to its ability to provide large-scale carbon dioxide removals.

Drax released its latest research on the value of the scheme, earlier this week.

Compiled by Baringa, on behalf of Drax, the research states that Drax’s proposals for BECCS could save the UK up to £15 billion in whole economy costs between 2030 and 2050.

Baringa’s findings also state that without BECCS at Drax, meeting carbon reduction targets is more complicated and expensive for the UK government and carbon savings would be needed in other sectors.

The report also concludes that the implementation of a bridging mechanism between the end of Drax’s renewable contracts in 2027 and the potential start of BECCS operations could save around £2 billion over the period, if gas prices remained similar to the current winter period.