Source · Select Committees · Public Accounts Committee
22nd Report - Government’s support for biomass
Public Accounts Committee
HC 715
Published 25 April 2025
Conclusions (2)
3
Conclusion
Rejected
We are not convinced the transitional support agreement between DESNZ and Drax provides good value for money for consumers. Government announced in February 2025 that it had agreed heads of terms for a deal to support Drax that will run from 2027 to 2031. The new support package means Drax …
Government Response Summary
The government disagrees with the recommendation, stating the proposed Drax contract prioritized secure, low-cost electricity supply over BECCS transition. It argues that including BECCS contractual requirements would expose the government to unacceptable legal and cost risks before a full assessment is finalized.
20
Conclusion
Rejected
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 …
Government Response Summary
The government disagrees, stating that the proposed contract with Drax was intended to secure electricity supply at the lowest cost without the cost of procuring this via the Capacity Market auction, and the CfD framework cannot bind generators to investment decisions beyond the 2027-31 contract term.