How can I reach you?

Hi Nick - I read the Grand Designs article with interest, as I'm purchasing a Shropshire Hills longhouse and would like to replace Rayburn with heat pump, so would be grateful to chat 'offline' further.

It's a bit of a no-brainer that spending billions on bioenergy is a bad energy investment that increases bills, and that the "halves subsidies" claim depends on a lot of things, mainly which year you're comparing it to and what happens to the price of electricity from 2027-31.

AND those homes would then save £42 each per year, or £66 million in total, on gas bills by being better insulated, and would reduce their use of gas, saving energy as well.

And what else could this pay for? Well in the medium scenario, £323m per year, or £1.2bn over four years, could insulate 1.5 million of the coldest, draughtiest homes in the country.

The new subsidies go from 2027-2031. So over 4 years total subsidies could come to:
£73m
£1.2bn
£2.5bn

The reason this all matters is spending billions on burning trees in power stations is a bad idea for the climate, for energy bills, for forests etc.

All of these subsidies are currently funded by adding levies to our energy bills.

Halved depends on which year you're comparing to - the Minister didn't say.

£323m per year would be roughly a halving of 2024's subsidies. But if electricity prices went any lower, and subsidies any higher, then it would be more than half of recent levels.

So in some cases yes they would be lower.

Would they be "halved"?? Maybe. It depends on the electricity price staying high and susbsidies staying low. But this Government's goal is to lower electricity prices...

Well... it depends. Subsidies are paid relative to the electricity price. If:

Electricity price HIGH (£150/MWh) Drax subsidies = £18m per year
Electricity price MEDIUM (£100/MWh) Drax subsidies = £323m per year
Electricity price LOW (£50/MWh) Drax subsidies = £628m per year

But with the new cap on Drax's electricity output - limiting it to running 27% of the year - will the total amount of subsidies be lower?

The new price the Government has offered - £112/MWh in 2012 prices - is £153/MWh in today's prices. That's more than wind and solar are being paid and *MORE* per unit of electricity than Drax is being paid now.

If the electricity price on the market is less than this, the Government tops up the payment. So the lower the price Drax gets for selling its electricity, the higher its subsidies.

Now the Government has decided to extend these subsidies after 2027.

The subsidies will be paid relative to the price of electricity. Drax will be guaranteed £112 (in 2012 prices) per Megawatt hour of electricity.

These subsidies are a combination of CfDs (Contracts for Difference) and Renewables Obligation Certificates.

They were due to stop in 2027.

In 2024 Drax got around £700m in subsidies
In 2023 it was around £530m
In 2022 it was around £800m

"This new deal halves the subsidies for Drax"

questions-statements.parliament.uk/written-sta...