UK reduces subsidies for Drax biomass power plant

Britain announced that it had reached a new agreement with Drax, which would reduce subsidies to the domestic power producers by half between 2027 and 2031. This will save consumers money while ensuring that the group uses sustainable sources of woody biofuel.

The government announced on Monday that Drax's role would be much more limited under the new agreement, providing low-carbon dispatchable energy only when "really needed".

The statement stated that the company would need to use 100% woody biofuel from sustainable sources instead of the 70% it used previously. It also said the new agreement will save consumers £170 million a year in subsidies compared to the alternative of purchasing gas.

Drax, Britain’s largest renewable energy generator by output has converted four coal-power plants to biomass and operates hydropower projects. The company has been waiting to hear about new government subsidies as current subsidies expire in 2027.

The statement stated that "this government will do what it takes to ensure energy security for the future and to protect the billpayers today."

Britain aims to decarbonise the power sector by 2030. This will require an increase in renewable energies, like wind and solar energy, as well projects that can store energy in the event of a lack of wind or sunlight.

(source: Reuters)