Ed Miliband to hand taxpayer billions to wood-burning power stations
Ed Miliband is poised to announce billions in new subsidies for wood-burning power plants to prevent Britain losing a critical source of electricity.
The Energy Secretary is understood to be set to offer support to Drax and other biomass operators, with a decision due as early as Monday.
Environmentalists are likely to see continued support for biomass fuel as a betrayal of Labour's promises to focus on clean energy.
Mr Miliband is a key advocate of net zero within the Government but is still expected to back wood-burning as a major source of energy, amid fears Britain may be unable to keep the lights on without sites including North Yorkshire-based Drax, the UK's largest power plant.
The Drax power station is a biomass plant, which generates power by burning wood. Biomass, which generates more than 10pc of Britain's electricity, is classed as carbon-neutral as trees can be planted to replace those burned for fuel and new trees absorb carbon while they grow.
However, the power source is seen as controversial because it still generates immediate emissions and has been blamed for fuelling deforestations. Drax has been accused of cutting down forests in North America to keep Britain running.
Much of the existing subsidy regime for biomass is scheduled to end in 2027, threatening the ability of generators to invest in their power plants and so potentially undermining a key source of baseload power in the grid – the steady supply of electricity that does not rely on intermittent sources such as the sun and wind.
A decision is needed soon on whether to continue to offer taxpayer support. The National Audit Office (NAO) last month said Drax had received £6.5bn of subsidies from government since 2002.
Drax won permission last year to build carbon capture facilities at the plant with the aim of preventing its emissions from entering the atmosphere, in a sign of continued support for the facility.
However, the Commons Public Accounts Committee (PAC) this week raised concerns about carbon capture, warning it was a high-risk 'gamble' on 'unproven' technology that will have a significant impact on bills.
The NAO has separately raised concerns about the environmental credentials of biomass power.
It said: 'Burning biomass derived from plants and trees releases carbon dioxide into the atmosphere in much the same way as burning fossil fuels. However, provided that the biomass came from a sustainable source, such as a well-managed forest, the carbon can be re-absorbed as it regrows in a relatively short time.
'In our view, the lack of an evaluation of how effective these arrangements have been, particularly given the long supply chains involved, means the Government cannot demonstrate that its current arrangements are adequate to give it confidence industry is meeting sustainability standards.'
Mr Miliband's expected support for wood-burning power plants comes after he performed an about-turn on Heathrow, abandoning his long-held opposition to a third runway to instead back the Government's new support for an expansion of Britain's biggest airport.
The Energy Secretary told Sky News: 'I abide by collective responsibility and what the Government has done, I do support what the Government is doing, which is that we have asked Heathrow to come forward with their plans.'
Rachel Reeves, the Chancellor, threw her support behind a Heathrow expansion as part of a broader package of pro-growth measures meant to boost the economy.
It suggests the weakness of the economy and fragility of the public finances have given pro-growth members of the Cabinet the edge over the environmentalists who favour placing net zero above all other priorities.
A Department for Energy Security and Net Zero spokesman said: 'The situation we inherited for large-scale biomass generators was unacceptable.
'When energy prices spiked as a result of Putin's weaponisation of gas supplies, some biomass generators made excessive profits.
'We are considering this issue carefully – we want a sensible solution that delivers for billpayers and we will provide an update shortly.'
Drax declined to comment. In the past, the company has said it is 'committed to ensuring the biomass we source delivers positive outcomes for the climate, for nature and for the communities in which we operate'.
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