Ministers continue to back 'renewable' energy companies

Ministers continue to back ‘renewable’ energy companies such as Drax despite accusations it ‘gamed’ subsidy rules to avoid repaying hundreds of millions of pounds to taxpayers

• The Government confirmed its support for industry in a review of the sector 
• It comes amid claims Drax manipulated green subsidies regime in energy crisis

Ministers are continuing to back ‘green’ energy companies such as Drax – despite accusations that it ‘gamed’ subsidy rules to avoid repaying hundreds of millions of pounds to British customers.

Biomass power stations – which create electricity by burning resources such as wood – have long drawn criticism from campaigners, who say their claims of producing ‘renewable’ energy from imported pellets are exaggerated.

But in defiance of these complaints, the Government yesterday confirmed its support for the so-called ‘sustainable’ industry in a review of the sector.

Graham Stuart, the minister for energy security and net zero, said biomass technology – which supplied 11 per cent of UK power last year – has an ‘extraordinary’ potential for transport, heat and electricity. 

A Government report said: ‘We will continue to monitor the levels of biomass supply to ensure the UK can secure the necessary supply for increasing biomass use across the economy and we will consider interventions to remove barriers to increasing biomass supply if necessary.’

Biomass giant Drax, which runs a power plant near Selby, North Yorkshire, continued to reel from claims it manipulated the green subsidies regime during the energy crisis triggered by Russia’s invasion of Ukraine

READ MORE: Mounting fury at Drax amid claims it’s exploiting government’s energy subsidies loophole to dodge paying cash-strapped households £639m amid cost-of-living crisis

But it came as biomass giant Drax, which runs a power plant near Selby, North Yorkshire, continued to reel from claims it manipulated the green subsidies regime during the energy crisis triggered by Russia’s invasion of Ukraine.

This was despite a requirement in its contract with the Government that said any extra cash that the company makes must be returned to bill payers, meaning households could have lost out on as much as £639million since April last year, according to analysis by Bloomberg.

Although Drax has strongly denied the claims, the chairman of Parliament’s energy committee has already said he wants to investigate them.

The Government’s new biomass strategy did suggest that ministers would look at the subsidies scheme in the autumn and examine whether it was appropriate to support the industry in the long term.

But Will Gardiner, Drax’s chief executive, welcomed what he saw as ‘clear support for sustainably sourced biomass’.

Lydia Collas of environmental think-tank Green Alliance said the report failed to address the lack of land and resources available to facilitate the biomass process.

Drax often touts its eco-credentials but analysis by think-tank Ember found its biomass station is ‘by far’ the largest single emitter in the UK energy industry ‘despite generating only a small share of power’.

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