Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, if he will make an assessment of the potential impact of increasing the price per megawatt hour of the subsidies received by the Drax Power Station by 13% on his plans to reduce household energy bills by up to £300.

The strike price for the proposed low carbon dispatchable CfD with Drax is £113 MWh (2012 prices) compared to £100 MWh (2012 prices) currently. This modest increase reflects that Drax’s fixed operating costs will be spread over far fewer units of generation. However, the proposed CfD arrangement caps the volume of supported generation to an annual load factor of 27%. Our analysis shows this would halve overall subsidy payments relative to current arrangements, resulting in a decrease of around £6 on the average household bill. Further, this arrangement incentivises dispatchable biomass generation only when the system needs it, ensuring consumers can benefit from cheaper wind and solar power at other times.