Energy minister Andrea Leadsom brought the financial constraints of the Levy Control Framework (LCF) to the fore last week.
Speaking in a Westminster Hall debate on biomass, Leadsom referred to the £1.5 billion LCF overspend on its £7.6 billion budget, attributed to the successful deployment of solar and onshore wind resulting in higher than expected payments.
She was stating that the next Contracts for Difference (CfD) auction, due by the end of this year, will include dedicated biomass technologies.
However, Leadsom reiterated energy secretary Amber Rudd’s comments from November, and appeared to cast doubt over the timing of the next set of three CfD auctions, by saying “if, and only if, the government’s conditions on cost reductions are met” would funding for the three rounds be made available.
So while on the surface it was good news for biomass generators – and companies thinking of shifting to co-firing or a full conversion – it was made clear the potential support is conditional on further subsidy cuts and savings elsewhere in the sector.
Leadsom also came out with some caveated praise for biomass. She acknowledged its renewable and low-carbon credentials, calling it “very valuable” because of its ability to be dispatchable and to deliver baseload electricity. But the energy minister warned it does not “rely on an inexhaustible fuel” like other renewable technologies, such as wind and solar, and that any further biomass expansion in the UK would need to be carefully managed.