The UK government has approved new subsidies for Drax, the country's largest power station, despite ongoing debate about the environmental impact of the wood pellets it burns. The deal guarantees Drax a minimum electricity price of £113 per megawatt hour between 2027 and 2031, ensuring the plant's continued operation. The government claims to have halved the subsidy and limited Drax's role in the energy system, but the decision comes as Drax faces scrutiny over the sustainability of its wood supply chain.
The UK has announced new subsidies for Drax , the country’s largest power station, despite a long-running battle over whether the wood pellets it burns for fuel are environmentally sustainable. Drax said on Monday it had agreed a contract for difference with the government for a minimum electricity price of £113 per megawatt hour between 2027 and 2031.
“Under this proposed agreement, Drax can step in to increase generation when there is not enough electricity, helping to avoid the need to burn more gas or import power from Europe, and when there is too much electricity on the UK grid, Drax can turn down and help to balance the system,” he said. Drax, formerly the UK’s largest coal-fired plant, now burns millions of tonnes of wood pellets. The original subsidies were designed to help it switch from using fossil fuels to biomass.
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