The economics of energy transition….

From an interview with the new CEO of Drax (the largest biomass electricity producer in the UK):

Drax received about £730 million in subsidies last year for its three biomass units, through schemes that pay it between £95 and £110 for every megawatt-hour (MWh) of electricity they generate. That makes it viable despite high running costs of £75/MWh, well above market prices of about £50/MWh…

Mr Gardiner drives a Tesla, bought two and a half years ago to be green even though it cannot get him all the way from his London home to Drax without stopping to recharge.

He criticises nuclear, describing the contract agreed for Hinkley Point at £92.50/MWh as very expensive. Sorry, how much is Drax getting again? “Similar, right, that’s why I want to bring the cost down because it needs to be cheaper.” In fact, Drax’s contract is even higher than Hinkley’s. So it is more expensive than a contract that he said is too expensive? He hesitates. “That’s a fair, er…” he begins, before trailing off for a second then adding: “Anyway, so I think nuclear is expensive.” He moves swiftly on to other concerns about nuclear clean-up and the government’s plans to invest directly in future plants, which he warns could “distort the market”.

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