The UK government has halved subsidies to Drax power station and hatched a new agreement whereby low carbon dispatchable power is only used ‘when it is really needed’.
From 2027, the plan is for Drax and other eligible large-scale biomass generators to be supported via a low-carbon dispatchable CfD (Contract for Difference) which, if approved, will keep the station’s four units running until 2031. Drax will switch to 100% ‘wood biomass from sustainable sources’, up from 70% currently.
“Under this proposed agreement, Drax Power Station can step in to increase generation when there isn’t enough electricity, helping to avoid the need to use more gas or import power from Europe. When there’s too much electricity on the UK grid, Drax can reduce generation, helping to balance the system,” according to a Drax statement.
In its report analysing the role of the power station between 2027-2031, the government took advice from the National Energy System Operator (NESO) on security of supply; analysed the effect on consumers of support for biomass versus alternatives; looked at issues around subsidy and sustainability in existing arrangements; and considered longer term issues around decarbonisation.
Michael Shanks, Parliamentary Under-Secretary of State (Minister for Energy), said in a statement, “There is a potential role for bioenergy with carbon capture and storage (BECCS), or Power BECCS, but realistically this will take time to implement and therefore cannot form the primary basis of this decision.”
Source: Drax
Drax said with ‘the right investment framework’, it could transition the site into the world’s largest carbon removal facility, and two BECCS units could remove 8Mt of CO2 a year. The power station began trialling BECCS in 2018 and a second pilot facility was installed by Mitsubishi Heavy Industries in 2020.
The subsidies provided to Drax are intended to offset negative externalities associated with burning fossil fuels by promoting what is perceived as a cleaner alternative.
However, when the environmental costs of biomass, such as the carbon emissions from burning wood pellets, impact on global forests and transport costs, are factored in, “the net benefit of these subsidies becomes questionable,” wrote Geoff Riley, in a paper entitled The Carbon Dilemma: Unpacking the economics behind Drax Power Station.
Funds spent on subsidising Drax would be better off being channelled into renewables, critics add, but the cost-benefit analysis of BECCS is complex.
“On one hand, it offers a potential pathway to removing CO2 from the atmosphere. On the other hand, it involves significant financial investment and carries the risk of perpetuating reliance on biomass, which may not be as sustainable as other renewable energy sources,” Riley notes.
BBC News claims Drax ‘has failed more than once to report it burned wood from primary forests’, while a Panorama report and programme claimed Drax held logging licences in British Columbia and used primary and old-growth forests for its pellets.
According to analysis from Ember Energy, Drax emits more CO2 than the next four largest power stations combined and it emitted 11.5 million tonnes in 2023.
Shanks said he recognised the strength of concerns about the use of unabated biomass. “It is not a long-term solution,” he states, adding it will have ‘proper options’ in four years’ time.
By displacing higher carbon thermal generation, Drax claims the power station will save around 4m tonnes of CO2e over the term.
Source: Drax
Transitioning Drax into the world’s first ‘carbon negative’ power station would also make Drax a hub of the UK’s first zero carbon industrial cluster – known as Zero Carbon Humber, helping to decarbonise the North of England.
Independent analysis from Baringa indicates the proposed agreement will save £1.3-1.6bn in electricity system costs annually.
