Drax Power Station: Subsidies
The question
To ask the Secretary of State for Energy Security and Net Zero, whether his proposed extension of subsidies for the Drax power station would raise the guaranteed strike price for the company from £100 MW/h to £113 MW/h.
Answered by Michael Shanks
The new CfD arrangement caps the volume of supported generation to an annual load factor of 27% compared to Drax’s current 65%. This incentivises dispatchable biomass generation only when the system needs it, ensuring consumers can benefit from cheaper wind and solar power at other times.
The new arrangement is estimated to halve subsidies to Drax, saving around £6 per household per year compared to current arrangements. The strike price for the new CfD is £113 (2012 prices) compared to £100 MWh currently. This modest increase reflects that Drax’s fixed operating costs will be spread over fewer units of generation, but consumers get more valuable power for lower overall subsidy.
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