Taxpayers could have to fork out £4billion to power station owner Drax under new clean energy funding plans even though campaigners dispute its green credentials.
The FTSE 250 firm, which previously ran the UK’s largest coal-fired power plant, now produces electricity by burning wood pellets, known as biomass, and receives a controversial Government subsidy that runs until 2027.
Drax is now lobbying for an extension that could lead to households footing a total bill of £4.1billion by the end of 2035 – according to analysis shared with The Mail on Sunday by energy think tank Ember.
It estimates taxpayers could pay at least £425 million to the firm annually, equivalent to £15.28 a year slapped on home energy bills.
The Government has been giving companies, including Drax, money through its biomass strategy as the UK aims to turn from fossil fuels towards renewable energy. Drax received £617 million in Government support last year alone for its biomass units.
Environmentally friendly?: Drax now produces electricity by burning wood pellets, known as biomass, and receives a controversial Government subsidy
But campaigners have long questioned its claim that burning wood creates ‘renewable’ energy.
The Government considers the practice to be green despite carbon dioxide absorbed by trees being released back into the atmosphere during the burning process.
Also, most of the pellets burned by Drax at its flagship power station in Yorkshire are imported from forests in the US and Canada.
‘We’ve already given Drax billions in subsidies, and it’s made bills more expensive while probably not helping to stop climate change,’ said Phil MacDonald, managing director at Ember.
‘Following the enormous increase in gas prices over the last few years, British people simply can’t take higher energy bills – we should be investing in clean energy which brings down bills, like wind and solar.’
Matt Williams at the Natural Resources Defence Council said: ‘The Government’s already wasted billions of bill-payers’ cash handing out low-carbon subsidies to British companies that claim to be green for them to burn North America’s forests in power stations.’
A Drax spokesman complained of ‘factual inaccuracies’ and ‘misguided assumptions’ in the report, saying: ‘We operate under the same mechanisms that almost all other UK electricity generators do.’
Ember stood by its analysis, highlighting the fact that it based the projections for Government subsidies on Drax annual reports.
A Department for Energy Security and Net Zero spokesperson said: ‘We do not recognise these theoretical and highly speculative figures.
‘Sustainable biomass plays a key role in delivering more secure, clean energy in Britain, generating 11 per cent of the country’s total electricity supply last year, supporting our Net Zero target.’
