Drax currently receives around GBP 1 billion (€1.2 billion) in annual subsidies for operating the former coal plant, which was gradually converted to be powered with biomass starting in 2013. From 2027 onwards, subsidies are to be reduced to GBP 470 million (€563 million), and the power station will only serve as a back-up to cheaper renewable energy sources. Michael Shanks, the UK’s Minister of Energy, told the BBC that the previous subsidies had allowed Drax to make “unacceptably large profits” and that the new deal would be a “step change in value for money and sustainability”.
The government announced that the Drax power plant will not run at all on days when a lot of wind and solar power can be generated. As Reuters reports, the power station will be operated at a maximum load factor of 27%, which is less than half of current levels, and will only provide electricity when it is “really needed”.
According to the BBC, the Drax power plant generates about 5% of the UK’s electricity. Critics have called it one of the country’s leading emitters of carbon dioxide. Drax disputes that description. All of the pellets used at the site are imported, mostly from the US and Canada. Part of the new deal is the requirement that 100% of the pellets must come from sustainable sources and that material from primary and old-growth forests will not receive any subsidies.
