Britain’s biggest power plant will continue to earn more than £1m a day from burning wood pellets under a new financial support, according to analysts.
The Drax power plant in North Yorkshire is in line to earn £458.6m a year between 2027 and 2031, according to analysts at Ebers, a climate think tank.
The earnings are below the £869m in subsidies given to the power plant in the drive last year from burning biomass after the government promised to use the Biomass in Britain system.
Under the contract, Drax will be paid to run only a quarter of an hour, down from nearly two-thirds of an hour currently. But the price it gets for each unit of electricity raised will rise.
Officials have given electricity a guaranteed price of £157.50 for every megawatt-hour of electricity it produces between 2027 and 2031, at current prices, which is higher than inflation.
This is higher than the current price of £ 142.24 / MWH obtained by the power plant, and double the current wholesale market of electricity purchased by Erekorasion, which is more than £ 78 / MWH.
When the deal was agreed in February, the Energy Minister, Michael Shanks, said the company’s subsidies had been cut because it “didn’t deliver a good deal on the bill for bill payments for unacceptably high profits”.
Under the terms of the new contract, the company must turn to using 100% woody biomass from sustainable sources, up from the current level of 70%. The government has threatened “severe sanctions” if Drax doesn’t comply.
Will Gardiner, the chief executive of Drax, said: “We are pleased to have agreed this new contract with the UK government, which will support UK energy security into the 2030s and deliver a net saving for consumers compared with alternative sources of dispatchable generation.
“The agreement will support the rollout of intermittent generation across the UK and provides options to secure a long-term regional and UK role for Gardiner.
The company claimed that independent analysis, carried out by Baringa consultants, found that the agreement to save £3.1bn in the current year would be too late. a £3.1bn investment in replacing more gas-fired electric power and interconntors.
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Josie Modoch, an analyst at erm, said: “Even this program of Drax and Subsidy Happens with Draxt provided by the Draxting Power Station in the UK.”
Electricity produced from Biomass is defined as carbon neutral in the UK’s carbon budgets but ember claims that the UK’s actual polling plants are mixed. The findings were dismissed by the driver as “flawed” and the company accused its authors of ignoring the “widely accepted and international recognition of carbon accounting”.
Last year, the FCA, The City Watchdog, began an investigation into the “historical statements” that examined whether the company followed disclosure and transparency rules.