UK's Drax Group received a record 999 million British pounds ($1.4 billion) in public subsidies in 2025 for its biomass power station, even as support is set to be cut from 2027, Ember strategists said in a note Thursday.
Ember analysts said the payments, funded through consumer energy bills, amount to about 2.7 million British pounds per day and add about 13 British pounds to the average UK household bill per year.
Frankie Mayo, senior UK analyst at Ember, said, subsidies are set to fall to about 460 million British pounds per year from early 2027, marking the start of a phase-out of support for large-scale biomass generation.
Mayo said that would still amount to about 1.25 million British pounds per day, or about 6 British pounds per household annually.
Drax operates the UK's largest power station by output and is also its single biggest carbon emitter. However, emissions from burning woody biomass are classified as carbon-neutral under current accounting rules, allowing it to qualify for renewable energy subsidies.
Ember said support has been delivered through two schemes, the Renewables Obligation, which paid 728 million British pounds in 2025 for three of Drax's generating units, and Contracts for Difference, which provided 271 million British pounds for a fourth unit.
Total subsidies paid to Drax since 2012 have reached 8.72 billion British pounds, the majority of which have been through the RO scheme, which is due to end in Q1 2027.
Ember said a new, lower CfD mechanism will replace it, with the contract running for up to four years until 2031. Though the strike price under the new scheme will rise to 157 British pounds per megawatt hour in 2024 prices, the volume of subsidized generation will be capped at lower levels.
However, despite the reduction in support, Ember expects Drax to remain the UK's largest emitter through at least 2030 due to the scale of its operations.
The long-term outlook for the plant remains uncertain, as Drax has stepped back from plans to invest in carbon capture technology, which had been central to its case for continued subsidies. Without carbon capture, Ember analysts say the rationale for ongoing public support weakens significantly.
The energy firm has already scaled back related projects and shifted investment towards other energy technologies, raising further questions over the future role of biomass in the UK's power mix.