Britain's small biomass power plants face an uncertain future after the Department for Energy Security & Net Zero confirmed it would not extend their subsidies beyond next year, a move ministers claim will save consumers £1 billion annually.
Subsidy payments under the Renewable Obligation scheme, which closed to new entrants almost a decade ago, are due to expire from April 2027, with different plants' support ending at different points over the following decade.
In a letter to the energy committee, Michael Shanks, the energy minister, wrote that the government did not intend to introduce successor subsidy support for these assets.
He said he was "confident that this is the right approach for UK billpayers" as small-scale biomass generation is relatively high-cost compared with other forms of electricity generation.
However, critics have condemned the decision as "baffling", warning it will result in the closure of plants burning domestically produced biomass, including woodchips.
Richard Coulson, biomass lead at the Wood Recyclers' Association board, said the government had failed to consider the "vital environmental service" that biomass plants provided as a domestic outlet for millions of tonnes of waste wood per year.
"Without support for these facilities, material will have to be exported or sent to landfill or worse — could end up being dumped or sent to illegal waste sites," he said.
"Our fundamental concern is that Government is looking at biomass primarily through an energy-policy lens rather than considering its interconnected role across energy, waste and resources. The contribution of these plants cannot simply be measured in Megawatts."
A Department for Energy Security & Net Zero spokeswoman said the Renewables Obligation had been designed as a time-limited scheme, with industry aware from the outset that support would run for 20 to 25 years. "Any potential subsidy must demonstrate it provides value for money to billpayers, and keeping bills down for consumers is essential to every decision we make," she added.
