The Government yesterday published its white paper on reforming the electricity market, which included a Renewable Energy Roadmap.
North Yorkshire-based Drax hopes to burn more biomass alongside coal but has been unable to do so at full capacity because current subsidies make it uneconomical. It has also put plans for three standalone biomass power plants on hold until support levels are clear.
Chief executive Dorothy Thompson said: “We are encouraged by the recognition of the greater role that electricity generation from sustainable biomass can make to meeting the Government’s climate change targets.
“That is very much in line with Drax’s focus as we seek to expand our biomass operations. However, in order to do so, we will need an appropriate level of support under the current renewables incentive mechanism. To that end, we eagerly await the Government’s proposals for the support levels from April 2013.”
The Government said it plans to publish a bio-energy strategy later this year, “articulating a clear vision for the growth of sustainable biomass energy in the UK”.
The Government also proposed new measures to reform the UK’s power market but delayed a key decision on payments to back up power plants to the end of the year.
With a quarter of the UK’s generating capacity shutting down over the next 10 years as old coal and nuclear power stations close, more than £110bn of investment is needed to build the equivalent of 20 large power stations and upgrade the grid, the Government said. “Without reform, our reserve capacity will fall to uncomfortable levels and there is a much higher risk of blackouts by the end of the decade,” said energy secretary Chris Huhne.
The government confirmed it will limit emissions from coal-fired power plants to 450 grams of carbon dioxide per kilowatt hour to ensure that no new coal plant will be built without carbon capture and storage technology.