Select committee: Public Accounts Committee
Conclusion 20
22nd Report - Government’s support for biomass
Published 25 Apr 2025
Addressed to HM Treasury
Public Accounts Committee Government support for biomass All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
Despite the new terms of the agreement, there are risks that the support will not offer consumers value for money. The agreement was reached through bilateral negotiations with Drax and included no element of competition.56 While the government claims that the new arrangements will reduce consumer subsidies to Drax, it will be paid £113 per megawatt hour (in 2012 prices) for the electricity it generates–far more than will be paid to offshore windfarms and other renewable generators under recent Contracts for Difference.57 After our evidence session, we received correspondence from Drax stating that it considers the strike price is justified because it provides dispatchable power which is available at any time, rather than the intermittent power provided by most renewable generators. As 54 Statement by the Secretary of State for Energy Security and Net Zero, UIN HCWS424, 10 February 2025 55 Statement by the Secretary of State for Energy Security and Net Zero, UIN HCWS424, 10 February 2025; Q74 56 Q 43 57 Qq 10– 11 15 biomass generators also have to pay for fuel, Drax argues that a fairer price comparison would be gas–fired power stations, which are markedly more expensive.58
From: Public Accounts Committee, 22nd Report - Government’s support for biomass (HC 715), 25 April 2025
Government response
Latest Treasury Minutes progress report to the Committee of Public Accounts on the Twenty-second Report of Session 2024-26
The government responded to the whole report on 4 June 2026.
Treasury minutes: Government response to the Committee of Public Accounts on the Twenty-second report from Session 2024-25
Published 10 July 2025.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government agrees with most of the Committee's recommendations on biomass, with target implementation dates between autumn 2025 and spring 2027, but disagrees on adding BECCS transition clauses to the Drax contract and says the KPMG reports are not a matter for it.
- On assessing its sustainability assurance approach, the government agrees, with a target date of autumn 2025, and says it is reflecting on evaluation and audit processes for the new Drax contract. It states the Ofgem investigation is evidence "the current assurance regime is working well".
- On a new oversight regime, the government agrees (target December 2025) and is "considering options to publish" its sustainability enforcement plans under the new Drax contract. It says any additional Ofgem oversight responsibilities "must be considered in the round".
- The government disagrees with adding clauses to the transitional support agreement to prompt Drax to transition to BECCS. It says such requirements would expose the government to "an unacceptable level of legal risk" until a full assessment of power BECCS is finalised.
- On the KPMG reports, the government says "This is not a matter for the government to consider", as the reports remain Drax's property and it is for Drax to decide whether to release them.