Report: Biomass power can save UK energy system up to £900 million a year by balancing variable renewables

Click here to read the report and one-page summary.

A new report by Baringa on behalf of the Renewable Energy Association (REA) finds that the use of biomass delivers significant benefits to the UK energy system. This includes providing up to 5.5 GW of reliable ‘firm’ power to help balance variable renewables, equivalent to approximately 90% of Britain’s total operational nuclear capacity. Keeping this capacity operational is projected to reduce Capacity Market costs in 2028/29 by around £900 million, with similar savings anticipated in future years.

Up to 8 GW of generation that is relied upon for periods of low wind are set to be retired by 2030, with only around 1 GW of new firm capacity currently expected to be added to the grid. As renewable deployment accelerates, sustainable biomass will play an important role in reducing the amount of gas generation or new build batteries required to balance the grid, and reducing carbon emissions by around 1 million tonnes per year delivering societal benefits valued at over £250 million each year.

In the UK, more than two-thirds (68%) of the biomass used for energy production in electricity, heat and transport comes from domestic sources. The UK biomass sector contributes around £2 billion in annual economic value, supporting over 34,000 jobs in farming, forestry, processing, transport and logistics, with most of these in rural areas.

Longer-term benefits from biomass include fitting existing facilities with Bioenergy with Carbon Capture and Storage (BECCS) technologies, which could help remove up to 10 million tonnes of CO₂ from the atmosphere by 2035. This would provide 79% of removals required under the Climate Change Committee’s Seventh Carbon Budget, and reduces the degree to which other higher cost or more disruptive actions are required, such as Direct Air Capture or fuel switching in industry.

Retaining biomass generation capacity will be critical as it enables conversion to BECCS from the early 2030s onwards. Analysis suggests that even a one-year delay could increase total costs of meeting climate targets by at least £1.2 billion.

In 2024, biomass and broader bioenergy provided around 14% of the UK’s total electricity generation. There are more than 200 biomass Combined Heat and Power (CHP) or power plants operating across the UK. Biomass also has additional applications in areas such as the decarbonisation of high-emissions sectors, including steel and chemical manufacturing, as well as the production of Sustainable Aviation Fuels (SAF).

Samantha Smith, Head of Biomass UK at the REA said:

“Sustainable biomass is already playing a vital role for the UK, driving down energy system costs and supporting tens of thousands of jobs in rural areas. As we scale up clean power by 2030 and shift away from reliance on foreign fossil fuels, sustainable biomass generation is only going to be become more essential in delivering energy security and keeping bills lower.

“By backing biomass and investing in greenhouse gas removal technologies such as BECCS on existing facilities, by 2035 we can potentially lock away more than 10 million tonnes of CO2 emissions each year, equivalent to cancelling every flight departing from Heathrow Airport for 17 months.”

Headline findings

Role and contribution of biomass 

  • Biomass provides reliable, weather-independent baseload power when energy supply is volatile, contributing up to 5.5GW of firm generation.
  • Biomass provides almost 12% of all energy consumed today in the UK with 650 operational biomass plants across the UK providing c. 9,000 direct jobs.
  • Biomass power remained the second largest source of renewable generation in 2024.  
  • In the year to March 2024, there were 5 periods when wind generation dropped below 11% of capacity for 24 hours or more, 17 periods when it dropped for more than 12 hours, and 30 periods when it dropped for 6 hours or more, causing a major shortfall in renewable supply. By consistently providing 2-3GW of dependable power, biomass can fill these gaps and provide grid stability. 

Value for money  

  • Keeping biomass capacity operational is projected to reduce Capacity Market costs in 2028/29 by around £900 million, with similar savings anticipated in future years.
  • Lower clearing prices directly benefit consumers by reducing the system costs passed on to consumers through electricity bills.
  • Based on replacement analysis, maintaining biomass capacity today could save more than £10 billion by preventing supply chain disruptions and avoiding the need to rebuild infrastructure.
  • Delaying BECCS deployment in the power sector is projected to increase costs to society of achieving Net-zero commitments by £1.2 billion per year of delay.

Energy security  

  • Gas, nuclear and biomass ‘firm’ capacity continues to provide almost 75% of de-rated capacity in the UK.  
  • A sustainable pathway for biomass and broader bioenergy use may see 180 TWh available across the UK in 2035, rising to 200-300 TWh by 2050.
  • In 2023, 68% of biomass used for UK energy generation (across electricity, heat, transport) came from domestic feedstocks. 
  • The sources of imports and market dynamics for biomass reduce risk, offering a more stable price and predictable supply.  
  • Biomass supports employment in farming, forestry, processing, transport, and logistics, particularly in rural areas.
  • Contributes significantly through the £2 billion annual economic value of the UK biomass sector, providing approximately 9,000 jobs.

Bioenergy with Carbon Capture and Storage (BECCS) 

  • By 2035, BECCS can deliver 79% of the carbon removals required under the Climate Change Committee’s Seventh Carbon Budget – equivalent to stopping all flights departing Heathrow for 17 months.
  • The carbon reduction delivered by power-BECCS is equivalent to taking 3.75 million petrol and diesel cars off the road. 
  • If BECCS is delayed, an additional 2GW of offshore wind and 5 GW of solar PV, on top of the 40 GW buildout already planned, will be needed to deliver carbon savings.  

ABOUT THE REPORT

This report was commissioned by Biomass UK, the REA’s member forum for biomass power, with analysis and modelling performed by Baringa Partners, based on its market-leading energy system modelling capability and the use of independent energy system models.