22nd Report - Government’s support for biomass

Select Committee
Public Accounts Committee HC 715 25 April 2025
Report Status Government responded
Conclusions & Recommendations 25 items (2 recs)
Source View on Parliament website
Government Response (AI assessment · 25 of 25 classified)
Accepted 11
Acknowledged 6
Deferred 4
Rejected 4
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Twenty-second report from Session 2024-25 · published 10 Jul 2025
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Recommendations & Conclusions

4 results
3 Conclusion Rejected
Include clauses in Drax's transitional support agreement to prompt BECCS transition.
Conclusion
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 … Read more
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.
HM Treasury
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18 Conclusion Rejected
Government extends financial support for Drax to secure national energy supply until 2031.
Conclusion
In February 2025, the Minister for Energy issued a statement confirming that the government had agreed heads of terms with Drax power station for financial support between 1 April 2027, when current support arrangements end, and 31 March 2031. The … Read more
Government Response Summary
The government explicitly disagrees with the Committee's (implied) recommendation regarding the Drax power station contract, explaining that the agreement prioritised securing electricity supply at the lowest cost and retaining future BECCS optionality, rather than committing to large-scale BECCS adoption which carries unacceptable legal and cost risks.
HM Treasury
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19 Conclusion Rejected
New Drax agreement aims for reduced operational role and significant subsidy savings.
Conclusion
DESNZ is clear that the agreement is intended to improve on current arrangements. Firstly, Drax will play a smaller role in the power system than it currently does. This means that Drax will receive support for a maximum of 27% … Read more
Government Response Summary
The government explicitly disagrees with the Committee's (implied) recommendation regarding the Drax power station contract, explaining that the agreement prioritised securing electricity supply at the lowest cost and retaining future BECCS optionality, rather than committing to large-scale BECCS adoption which carries unacceptable legal and cost risks.
HM Treasury
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20 Conclusion Rejected
Bilateral Drax agreement raises value-for-money concerns due to high subsidy rates.
Conclusion
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 … Read more
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.
HM Treasury
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