Consumers could save up to £2 billion if the government agrees to rethink plans for green energy subsidies, Britain’s biggest power station has claimed.
Drax, operator of the eponymous plant in North Yorkshire, said the savings would accrue over 15 years if the government were to allow biomass fuel, or wood pellets, to qualify for the same subsidies as wind and solar technology.
To support renewable electricity generation, the government offers subsidies to companies, which consumers then pay for through their bills. Three auctions for new renewable energy contracts are planned, but all are focused on offshore wind power.
According to research by NERA Economic Consulting and Imperial College London, commissioned by Drax, there are hidden costs associated with wind and solar power, such as the need to secure back-up power generation. It found that offshore wind would require a contract of £127 per megawatt-hour, solar £96 and biomass £84.
Dorothy Thompson, chief executive of Drax, said: “Opening up energy auctions to include other renewables could save consumers £2 billion and, with more biomass in the mix, energy security is also boosted.”