Government Support for Low-Carbon Dispatchable Generation from 2027

The Government has announced a new support mechanism for sustainable biomass generation post-2027.

From 2027, Drax and other eligible large-scale biomass generators will be supported via a lowcarbon dispatchable CfD (Contract for Difference).

If approved, the plan will keep the power station running until 2031. Under this proposed agreement, Drax Power Station can step in to increase generation when there isn’t enough electricity, helping to avoid the need to use more gas or import power from Europe. When there’s too much electricity on the UK grid, Drax can reduce generation, helping to balance the system.

Importantly, the mechanism will result in a net saving for consumers. Independent analysis from Baringa indicates the proposed agreement will result in a £1.6-3.1bn reduction in electricity system costs per year.

The agreement also prioritises biomass sustainability. Drax supports these developments and will continue to engage with the UK Government on the implementation of any future reporting requirements.

Source: Drax Group plc