Farce as £1bn subsidy to burn wood faces axe
‘Time to stop propping up the industry’
CONTROVERSIAL subsidies for burning wood in power stations could be scrapped in the drive to clean up Britain’s air.
Firms that burn wood pellets currently receive about £1billion a year because, unlike coal, these are considered renewable sources of energy.
But critics say burning wood produces similar amounts of carbon dioxide to coal, contributing to air pollution.
It also increases the logging of forests in the US, while shipping them to Britain in vast quantities has a further negative effect on the environment.
The Government yesterday revealed it could scrap subsidies for burning wood, as well as those for using ‘red diesel’. The taxpayer funds payments worth about £2.4billion a year to firms who use the fuel to power construction machinery such as bulldozers, as well as cooling units in lorries. Subsidies for farmers who use red diesel in tractors and combine harvesters would be unaffected.
The Government’s clean air strategy, unveiled yesterday by Environment Secretary Michael Gove, includes proposals to scrap some subsidies paid under socalled ‘contracts for difference’. The contracts, which last until 2027, offer payments of about £100 per megawatt hour for burning imported wood – more than double the wholesale energy price.
Britain’s biggest power station, Drax, near Selby, North Yorkshire, burns about 7million tons a year of compressed wood pellets imported from the US and Canada. Drax supplies around 7 per cent of the UK’s electricity, with four of its six units converted to burn the pellets. Britain is committed to closing all its coal power stations by 2025 unless they can be adapted to ‘capture’ carbon without releasing it into the air.
One of the key architects of schemes to burn ‘biomass’ such as wood pellets was disgraced former Liberal Democrat energy secretary Chris Huhne. He was hired by US firm Zilkha Biomass, which produces wood pellets, after serving a prison sentence in 2013 for perverting the course of justice.
A Drax spokesman defended the technology, stressing it is ‘critical to the UK electricity system because it provides low- carbon, cost-effective power reliably, whatever the weather’ – unlike wind and solar energy sources.
But Sasha Stashwick of the Natural Resources Defence Council, an environmental campaign group, said: ‘Burning trees in giant power plants is bad for the climate and the air Britons breathe. It’s important that [the clean air strategy] recognises the drawbacks of biomass energy ... and rings the death knell on new rounds of subsidies for this dirty power source.
‘Sadly, it does nothing to stop billions of pounds going to existing coal-to-biomass conversions.
‘It’s time to stop propping up the biomass industry full stop and direct the savings to real clean air and energy.’
Britain’s drive to meet tough new air quality targets could also see an end to some subsidies for red diesel, which costs around 62p a litre compared with about 131p for standard ‘white’ diesel. Officials said they wanted to ‘ensure its lower cost is not discouraging the transition to cleaner alternatives’.