According to Wikipedia, in 2021, the company was taken out of the S&P Global Clean Energy Index, as it is no longer considered to be a "clean" energy company by the S&P.
It seems nobody is fooled by this company but the subsidies keep coming.
This literally makes my brain hurt. Drax 'carbon neutral' biomass is the result of our supposed leaders' brains running in neutral for extended periods. Energy policy in this country is the equivalent of an engine running, making lots of noise, where the Fat Controller has his foot on the accelerator, pressing it down harder and harder, but we get nowhere at all. The lights are on, blinking furiously, but Net Zero neurons are making any meaningful connections in the brains of those charged with formulating and implementing our national energy policy. It's not going to remain that way. Sooner or later, some bright spark is going to shove the engine into reverse and watch gleefully as Britain crashes its way back through centuries of industrial progress to the Dark Ages.
Even devout environmentalists now question the credentials of this form of renewable generation and want it removed from being classified renewable. Reality is in the short term (and thats if you believe they will plant replacement trees and manage them) its doing far more damage than keeping burning coal. The problem though is there is nothing to replace a big slug of dispatchable generation and the govt will say its from a diversifiable fuel source but enough people in the US are challenging whats going in Louisiana you could easily see it stopped. Furthermore with the shambles over nuclear we need every Watt we can lay our hands on for next 5 years + so govt needs to find a fudge. Labour wont change it and likely to double down as they still say we can decarbonise the grid by 2030 (they can't nor could they with 28B/yr) so can't afford to lose DRAX's so called renewable contribution. The whole thing is a mess but in the list of messes plenty of things trump net zero currently in the eyes of the electorate so nothing will change.
Oh and by the way existing ROC payments increase by 9.7% in April and CfD by 3.9% so Drax will be gaining even more subsidy. Interestingly they don't get any CM payments for biomass maybe excluded due to ROC payment regime.
Thank you so much David for taking a close look at the black subsidy hole that is the not clean nor green Drax operation.
I took a look at Drax in October 2022 and the fact that they have been felling old growth forests in British Columbia to feed the beast: "Precious primary old growth forests are going up in smoke as we pay billions to make it happen" https://azradale.substack.com/p/precious-primary-old-growth-forests
I am sharing your article with UK Column with a view to making more people aware of the Drax consultation and the massive subsidies we are paying.
Making false representations in this case is pushing hypothetical ideas as verified facts. And the scientists, engineers and politicians should know they aren’t facts.
Biomass is greenfoolery on steroids and highly environmentally damaging - the ever increasing subsidies for this inept power source must be stopped - if it’s so good for net zero, let it stand on its own two feet and compete in the market (it can’t and won’t)
I believe That Drax also burns a small percentage of straw. Storage is an issue, given that straw is only produced for a relatively small part of the year coinciding with lower demand.
As an American, I am ever curious as to why the British public and particularly it's chattering classes seem even more quixotic and addled than the folks on this side of the Atlantic in relation of the dumbest energy ideas extant. That is hard to believe given the utterly brainless social missions our new lefty liberals espouse; but make no mistake, our not totally nonfunctional liberals are beginning to get the idea that maybe the green nonsense isn't so great after all and our politicians are reacting to their possible unemployment should they lose elections because of their green platforms. Why is it then that the British public doesn't have a more angry response to its government using completely topdown, authoritarian measures to squeeze the civilian population into forced poverty in the face of frankly stupid energy plans and resource waste.
BECCS is of course the solution advocated by erstwhile Technical Director at Drax, and member of the Climate Change Committee, Rebecca "BECCS" Heaton (now an advisor to Lloyds Bank). She has a degree in forestry. Deben continues to push for it from the sidelines as the ex CCC Chair, probably at least in part since the fiasco on failure to calculate the storage requirements for a renewables grid came to light.
It's worth noting some of the other biomass efforts: Lynemouth Power Station operates via a CFD that has a slightly higher strike price than the one for Drax. Its market behaviour has been similar, as this chart reveals:
New on the scene is the Teesside Renewable Energy Project biomass with CHP plant, which started up in October after a long gestation, when the new lower winter season Baseload Market Reference Price took effect: it has an expensive CFD, currently worth £165.97/MWh, presumably with income for heat on top. Two other biomass CHP projects failed to reach fruition on the back of over-ambitiously low CFD bids: Grangemouth Renewable Energy Ltd. never got off the ground, and was struck off and its CFD contract formally terminated by LCCC in 2018 - its strike price would now be £82.58/MWh, with a similar fate befalling Rebellion Biomass LLP seeing its CFD terminated in 2021 alongside liquidation, with £86.22/MWh in current money quite inadequate to save it.
You might have thought that these failures would have informed DESNZ and ministers about the futility of believing in uncommercial CFD strike prices.
It is perhaps useful to understand how the Baseload Market Reference Price is constructed, and why it has led to the behaviour we have seen in CFDs subject to it. Originally, it was lobbied for on the grounds that baseload plants should operate as baseload, with a price basis that reflected 24x7 operation, including during the less remunerative overnight hours as well as simply being there in peak rush hours. Because of the "must run" nuclear, baseload prices were anticipated to be low (meaning that a CFD would pay out more against a given strike price). That worked in favour of Drax and Lynemouth until the energy crisis. Suddenly the shortage of French nuclear and the risk of unanticipated breakdowns in the aging UK nuclear fleet meant that nuclear plant was no longer keen to offer cheap prices for forward sales. Instead, they tended to make rather notional offers that they hoped would not be taken up, at very high prices.
Why did they do this? In part, because forward sales threatened to tie up enormous amounts of capital in collateral against performance, and customers would likewise see huge demands for collateral against non-payment risk. Market liquidity for all hedging declined sharply. The risk of having to buy in cover should a plant suffer an extended outage at truly astronomic prices was asymmetric and not worth the candle.
However, the BMRP is set a season at a time, using quotations for baseload power provided by London electricity brokers for the entire winter and summer seasons made over the course of the previous 6 months, so that summer season prices were being set during the difficult winter conditions. Note that this is just quotations: notional at best, given the market conditions. At the beginning of the 6 months of pricing there was no way of being sure whether a sale made would be way high or low relative to the 6 month average of baseload prices. Liquidity was simply not there to make steady sales anyway. The result was that essentially no forward sales were made on BMRP terms. With the BMRP set way above indexed strike prices, the CFD effectively became an expensive tax on production, with units only fired up when day ahead prices were high enough to pay this tax and leave a profit. Hence the very limited operation, confined to tight market conditions on windless days in rush hour.
In fact, even if hedge sales had been made behaviour would have been little different. Consider a sale made at a comfortable margin above BMRP - at say £450/MWh. If the Day Ahead Market was at £200/MWh the alternatives would be to run the plant paying ~£270/MWh in CFD tax and making a margin of perhaps £30-40/MWh, or keeping the plant shut down and buying CCGT output at £200/MWh to feed into the sales at £450/MWh, banking a profit of £250/MWh. It's a no-brainer to stay shut down! OTOH, the opportunity to charge £4,000/MWh in a tight market is precluded if you have already sold at £450/MWh.
Incidentally, it seems from the Drax accounts that they actually sell power to customers at Day Ahead Market prices, averaging £220.7/MWh in 2022, matching a verification calculation from grid data on generation and prices.
The observed behaviour is entirely economically rational. The underlying problems with the design of BMRP have been cruelly exposed, both coming and going. Similar problems can be anticipated with some of the proposed CFDs for illiquid markets such as hydrogen - or BECCS carbon, which would act as a multiplier on BMRP effects.
Another great article exposing the nonsense of free/cheap renewable fuel (despite the promises my elec bill keeps going up though). Unfortunately im resigned to our mainstream policiticans simply doubling down on their bets once they've been exposed. It happens all the time - they never reverse. For me it's only the catastrophic failure of the grid that can cause a reverse and even then I'll bet the blame is apportioned elsewhere. We need a complete new political class. Our current class are utterly useless, economically and scientifically inept and school ground dunces.
You have more faith than me. We are sailing too close to the wind. In the next 5yrs (max) I think it will happen even though ours bills will continue to increase.
According to Wikipedia, in 2021, the company was taken out of the S&P Global Clean Energy Index, as it is no longer considered to be a "clean" energy company by the S&P.
It seems nobody is fooled by this company but the subsidies keep coming.
Drax really is worthy of prime time Documentary.
This literally makes my brain hurt. Drax 'carbon neutral' biomass is the result of our supposed leaders' brains running in neutral for extended periods. Energy policy in this country is the equivalent of an engine running, making lots of noise, where the Fat Controller has his foot on the accelerator, pressing it down harder and harder, but we get nowhere at all. The lights are on, blinking furiously, but Net Zero neurons are making any meaningful connections in the brains of those charged with formulating and implementing our national energy policy. It's not going to remain that way. Sooner or later, some bright spark is going to shove the engine into reverse and watch gleefully as Britain crashes its way back through centuries of industrial progress to the Dark Ages.
Even devout environmentalists now question the credentials of this form of renewable generation and want it removed from being classified renewable. Reality is in the short term (and thats if you believe they will plant replacement trees and manage them) its doing far more damage than keeping burning coal. The problem though is there is nothing to replace a big slug of dispatchable generation and the govt will say its from a diversifiable fuel source but enough people in the US are challenging whats going in Louisiana you could easily see it stopped. Furthermore with the shambles over nuclear we need every Watt we can lay our hands on for next 5 years + so govt needs to find a fudge. Labour wont change it and likely to double down as they still say we can decarbonise the grid by 2030 (they can't nor could they with 28B/yr) so can't afford to lose DRAX's so called renewable contribution. The whole thing is a mess but in the list of messes plenty of things trump net zero currently in the eyes of the electorate so nothing will change.
Oh and by the way existing ROC payments increase by 9.7% in April and CfD by 3.9% so Drax will be gaining even more subsidy. Interestingly they don't get any CM payments for biomass maybe excluded due to ROC payment regime.
Thank you so much David for taking a close look at the black subsidy hole that is the not clean nor green Drax operation.
I took a look at Drax in October 2022 and the fact that they have been felling old growth forests in British Columbia to feed the beast: "Precious primary old growth forests are going up in smoke as we pay billions to make it happen" https://azradale.substack.com/p/precious-primary-old-growth-forests
I am sharing your article with UK Column with a view to making more people aware of the Drax consultation and the massive subsidies we are paying.
I always wonder how all of this climate policy nonsense is not prosecuted under Section 2 of the 2006 Fraud Act.
https://www.legislation.gov.uk/ukpga/2006/35/section/2
Making false representations in this case is pushing hypothetical ideas as verified facts. And the scientists, engineers and politicians should know they aren’t facts.
It would probably be more efficient to burn U.K. bureaucrats.
Thanks David, great analysis again
Biomass is greenfoolery on steroids and highly environmentally damaging - the ever increasing subsidies for this inept power source must be stopped - if it’s so good for net zero, let it stand on its own two feet and compete in the market (it can’t and won’t)
It's a scam.
I know it's a scam, you know it's a scam, even the "experts" know it's a scam, but scum like Gummer and Jailbird Chris Huhne make fortunes out of it.
I believe That Drax also burns a small percentage of straw. Storage is an issue, given that straw is only produced for a relatively small part of the year coinciding with lower demand.
As an American, I am ever curious as to why the British public and particularly it's chattering classes seem even more quixotic and addled than the folks on this side of the Atlantic in relation of the dumbest energy ideas extant. That is hard to believe given the utterly brainless social missions our new lefty liberals espouse; but make no mistake, our not totally nonfunctional liberals are beginning to get the idea that maybe the green nonsense isn't so great after all and our politicians are reacting to their possible unemployment should they lose elections because of their green platforms. Why is it then that the British public doesn't have a more angry response to its government using completely topdown, authoritarian measures to squeeze the civilian population into forced poverty in the face of frankly stupid energy plans and resource waste.
BECCS is of course the solution advocated by erstwhile Technical Director at Drax, and member of the Climate Change Committee, Rebecca "BECCS" Heaton (now an advisor to Lloyds Bank). She has a degree in forestry. Deben continues to push for it from the sidelines as the ex CCC Chair, probably at least in part since the fiasco on failure to calculate the storage requirements for a renewables grid came to light.
It's worth noting some of the other biomass efforts: Lynemouth Power Station operates via a CFD that has a slightly higher strike price than the one for Drax. Its market behaviour has been similar, as this chart reveals:
https://i0.wp.com/wattsupwiththat.com/wp-content/uploads/2024/01/Biomass-CFD-Gen-1705529648.0472.png
New on the scene is the Teesside Renewable Energy Project biomass with CHP plant, which started up in October after a long gestation, when the new lower winter season Baseload Market Reference Price took effect: it has an expensive CFD, currently worth £165.97/MWh, presumably with income for heat on top. Two other biomass CHP projects failed to reach fruition on the back of over-ambitiously low CFD bids: Grangemouth Renewable Energy Ltd. never got off the ground, and was struck off and its CFD contract formally terminated by LCCC in 2018 - its strike price would now be £82.58/MWh, with a similar fate befalling Rebellion Biomass LLP seeing its CFD terminated in 2021 alongside liquidation, with £86.22/MWh in current money quite inadequate to save it.
You might have thought that these failures would have informed DESNZ and ministers about the futility of believing in uncommercial CFD strike prices.
It is perhaps useful to understand how the Baseload Market Reference Price is constructed, and why it has led to the behaviour we have seen in CFDs subject to it. Originally, it was lobbied for on the grounds that baseload plants should operate as baseload, with a price basis that reflected 24x7 operation, including during the less remunerative overnight hours as well as simply being there in peak rush hours. Because of the "must run" nuclear, baseload prices were anticipated to be low (meaning that a CFD would pay out more against a given strike price). That worked in favour of Drax and Lynemouth until the energy crisis. Suddenly the shortage of French nuclear and the risk of unanticipated breakdowns in the aging UK nuclear fleet meant that nuclear plant was no longer keen to offer cheap prices for forward sales. Instead, they tended to make rather notional offers that they hoped would not be taken up, at very high prices.
Why did they do this? In part, because forward sales threatened to tie up enormous amounts of capital in collateral against performance, and customers would likewise see huge demands for collateral against non-payment risk. Market liquidity for all hedging declined sharply. The risk of having to buy in cover should a plant suffer an extended outage at truly astronomic prices was asymmetric and not worth the candle.
However, the BMRP is set a season at a time, using quotations for baseload power provided by London electricity brokers for the entire winter and summer seasons made over the course of the previous 6 months, so that summer season prices were being set during the difficult winter conditions. Note that this is just quotations: notional at best, given the market conditions. At the beginning of the 6 months of pricing there was no way of being sure whether a sale made would be way high or low relative to the 6 month average of baseload prices. Liquidity was simply not there to make steady sales anyway. The result was that essentially no forward sales were made on BMRP terms. With the BMRP set way above indexed strike prices, the CFD effectively became an expensive tax on production, with units only fired up when day ahead prices were high enough to pay this tax and leave a profit. Hence the very limited operation, confined to tight market conditions on windless days in rush hour.
In fact, even if hedge sales had been made behaviour would have been little different. Consider a sale made at a comfortable margin above BMRP - at say £450/MWh. If the Day Ahead Market was at £200/MWh the alternatives would be to run the plant paying ~£270/MWh in CFD tax and making a margin of perhaps £30-40/MWh, or keeping the plant shut down and buying CCGT output at £200/MWh to feed into the sales at £450/MWh, banking a profit of £250/MWh. It's a no-brainer to stay shut down! OTOH, the opportunity to charge £4,000/MWh in a tight market is precluded if you have already sold at £450/MWh.
Incidentally, it seems from the Drax accounts that they actually sell power to customers at Day Ahead Market prices, averaging £220.7/MWh in 2022, matching a verification calculation from grid data on generation and prices.
The observed behaviour is entirely economically rational. The underlying problems with the design of BMRP have been cruelly exposed, both coming and going. Similar problems can be anticipated with some of the proposed CFDs for illiquid markets such as hydrogen - or BECCS carbon, which would act as a multiplier on BMRP effects.
Another great article exposing the nonsense of free/cheap renewable fuel (despite the promises my elec bill keeps going up though). Unfortunately im resigned to our mainstream policiticans simply doubling down on their bets once they've been exposed. It happens all the time - they never reverse. For me it's only the catastrophic failure of the grid that can cause a reverse and even then I'll bet the blame is apportioned elsewhere. We need a complete new political class. Our current class are utterly useless, economically and scientifically inept and school ground dunces.
You have more faith than me. We are sailing too close to the wind. In the next 5yrs (max) I think it will happen even though ours bills will continue to increase.
288 K w GHE – 255 K wo GHE = 33 C cooler & -18 C Earth.
Just flat wrong.
Calculated 396 up/333 “back”/2nd net 63 GHE unreal perpetual “extra” energy loop.
Just flat wrong.
Earth radiating 396 W/m^2 as a 16 C BB.
Just flat wrong.
GHE
Just flat wrong.
CAGW
Just flat wrong.