UK utility Drax aims to sign the final contracts-for-difference (CfD) agreement with the UK government for biomass firing at its four units "during summer 2025", the firm said in its trading update on 1 May.
The process is subject to parliamentary procedures, including the passage of the requisite Statutory Instrument, which was first laid before parliament in March, Drax said.
The deal will also be subject to the UK's subsidy control regime.
Drax and the UK government agreed preliminary terms in February to keep all four of the biomass-fired units at the North Yorkshire power plant operational beyond March 2027 — when the current scheme expires — and until March 2031 to ensure security of supply.
But the government was yet to make a decision on the implementation of bioenergy with carbon capture and storage (Beccs). The UK public accounts committee said in a report late last week that the government "has missed an opportunity" in its transitional deal with Drax to incentivise Beccs investments. It suggested that the Department for Energy Security and Net Zero (DESNZ) should consider including clauses in its transitional support agreement to spur Drax to start its Beccs transition.
The government's initial time frame for the first Beccs plant in the UK to be operational by 2030, "will not be achieved", the report said, adding that the government has yet to set a new target. The committee called for the DESNZ to map a path for Beccs to ensure concrete action is taken, or it should put in place contingency plans on how it will achieve the net carbon removals if Beccs is no longer viable.
