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The contribution to energy bills from a government deal with a biomass electricity provider will fall in the coming years as subsidies are cut under a new agreement.
The Department for Energy Security and Net Zero (DESNZ) revealed consumers would save £170m per year under a new deal with Drax covering 2027-2031.
That projection is based on the halving of the North Yorkshire power station’s government subsidy in that time.
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DESNZ said Drax would also play a much more limited role in the power system in that time, providing electricity only when it is really needed compared to current generation averaging around two-thirds of a year.
Drax, a former coal-fired plant which now burns wood pellets, is paid to generate energy using wood that must be 70% sustainable.
That sustainability figure will rise to 100% by 2027 under the new deal.
Its operations are classed, controversially, as renewable in the UK because the emissions released from burning the wood can be reabsorbed by new trees that grow in the place of those burned.
Drax is currently classed as Britain’s largest renewable power generator by output as it has the capacity to power the equivalent of five million homes.
The company, which has previously been fined for misreporting data on wood it has used and criticised over its CO2 emissions, also operates hydro power projects.
The government is aiming to decarbonise the power sector by 2030.
Meeting this target will require a large increase in renewable energy, such as wind and solar, as well as projects
that store energy for when there is…
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