Despite emitting more carbon than coal, the government backs Lynemouth’s green credentials – granting its owner £700 million in subsidies. Christine Ro and Tom Brown investigate
Lynemouth is a modest village on the Northumberland coastline. When there’s traffic, it centres around the village’s few off-licences and takeaway businesses. Rather than seaside attractions, Lynemouth has a power station next to the sea, whose grey stacks (and nearby wind turbine) loom over the village.
Lynemouth also has strong reminders of the coal industry that once flourished here. The centre of the village features a plaque and a sculpture dedicated to coal mining. The village’s social hub remains the Miners Welfare Institute (the ‘Tute’), where country music blares and old-timers reminisce about when the pits were open. Scenes for Billy Elliot, set during the miners’ strikes of the 1980s, were filmed in the village.
Lynemouth’s location has long been strategic for the UK’s power sector. A coal company established it in the 1920s as a model village. But several decades on, the collieries started to close. A coal-fired power station opened in 1972. The Czech multinational company EPH purchased the plant in 2016. It now runs entirely on wood. The power station doesn’t excite strong feelings in Lynemouth. One resident, pensioner Ann Colman, said she regularly sees bursts of black smoke from the power station and, on balance, thinks it’s a positive for the village. ‘It is something that is making this very poor area tick over a bit better than it would otherwise.’
However, she wonders if it makes environmental sense for it to run on wood shipped in from around the world. Many people, although not yet the UK government, are asking the same question.
WASTE WOOD
Some of the wood Lynemouth burns comes from Europe: Estonia, Latvia, Lithuania, Norway and Sweden. But mainly it originates in Canada and the USA, where mills grind the wood into pellets: uniform little nuggets that burn evenly. The wood pellets are then shipped to the Port of Tyne, near Newcastle, where they’re loaded onto a specially built rail line and transported straight into the power station.
A Freedom of Information (FOI) request to the Low Carbon Contracts Company shows that the wood Lynemouth received in 2023–24 was a mix of clear-fell
(where most, if not all, of a forest is felled) and forest thinning. Biomass companies use terms such as ‘forestry residue’ and ‘waste wood’ to describe the forest products being used in their power stations. Almuth Ernsting, a researcher and campaigner at the advocacy organisation Biofuelwatch, calls this a misnomer. There are ‘vast amounts of whole trees going into pellet mills’, she explains.
However, Lynemouth has not just been burning ‘waste wood’. An FOI document reveals that some of the wood obtained in 2023–24 from the USA was longleaf pine – a protected species. In 2024, the Financial Times obtained leaked emails that showed that Lynemouth knew that some of the wood pellets it received from Canada were not sustainable according to UK rules.
Lynemouth Power’s website states that it ‘uses sustainably sourced renewable wood pellets, primarily from the USA and Canada’. It also points to certification: ‘LPL [Lynemouth Power Limited] uses robust and independently audited certification systems for sustainable biomass across the whole supply chain from production and harvesting to transportation and use. These include the Green Gold Label and the Sustainable Biomass Partnership.’
However, Green Gold Label has confirmed that Lynemouth isn’t a certified participant of the system. As for the Sustainable Biomass Program (SBP), Lynemouth has a five-year certification. It’s audited annually (which can be conducted remotely). Such certification helps unlock certain government support.
SBP’s CEO, Carsten Huljus, does acknowledge that ‘there is no universal consensus on the definition of sustainability, hence why it is critical that SBP consults with its wide range of stakeholders in setting its standards.’ SBP, which was established by energy companies, sets sustainability standards in consultation with industry, civil society and others. Under regulations covering responsible forest management, wood from old-growth forests can be considered sustainable under SBP standards.
The UK government, like the EU, considers biomass a renewable and carbon-neutral form of energy production on the basis that trees can grow back. Adding biomass into its energy mix has allowed the UK to claim major emissions reductions.
Many people consider it illogical to count wood burning as carbon-neutral, given the decades it takes to make up for the lost carbon storage. There’s also the climate toll of shipping wood across the ocean and burning it. Strikingly, burning wood actually produces more greenhouse gases than coal, per unit of energy. More wood needs to be burned, compared to fossil fuels, to generate the same amount of energy.
Replanting after cutting down trees to feed the biomass industry typically consists of uniform plantations. The number of trees may be the same or even greater, but such plantations have limited biodiversity and carbon storage.
PRICE IS RIGHT
In recent years, Lynemouth has gone months without actually generating any power, even during the current cost-of-living crisis. Documents obtained through FOI requests show that the station didn’t generate power during October–November 2022, February–March 2023, and June–September 2023. This followed Russia’s full-scale invasion of Ukraine, which led to a European energy shortage and rapid hikes in electricity prices for consumers. Analysing the 2022–23 data, Ernsting points out: ‘Not only was the plant switched off during one-third of the year, but overall, it would have operated at less than 19 per cent of its capacity.’
Financial news agency Bloomberg has reported that Lynemouth started to reduce its output following an increase in electricity prices in 2022. EPH has stated that this was due to outages, then market volatility.
The government’s Contract for Difference (CfD) subsidy to renewable energy generators such as Lynemouth is structured in such a way that it makes financial sense for power operators to reduce output when electricity prices are high. Otherwise, they would have to return money to the public purse. ‘In many cases, when the market price is above the [set] price, then you’re meant to pay back the government,’ says Martin Pigeon, a campaigner for the environmental campaign group Fern. ‘But they [biomass operators] don’t like doing it. And so they prefer not running the plants.’
The CfD calculations depend on a key figure called the strike price. When the market price of electricity is lower than the strike price, the power operator gets paid the difference (paid for by higher prices for consumers). When the market price is higher than the strike price, the operator pays the government.
Lynemouth’s adjusted strike price in 2024 was £145.02/MWh. This is significantly higher than for other types of renewable energy. In September 2024, the government allocated strike prices mostly between £50 and 60 for solar and wind projects.
‘This is an incredibly expensive form of electricity production,’ Ernsting comments, compared to how dramatically wind and solar prices have dropped in recent years. The CfD makes up the bulk of Lynemouth’s subsidies. Analysis by Ember, an energy research organisation, indicates that Lynemouth received £675 million in CfD payments between 2018 and 2024. It received a further £16 million in Renewables Obligation payments up to 2023.
Lynemouth’s accounts show that it recorded a profit of £135 million in 2023, almost twice as much as in 2022, despite generating substantially less electricity.
There is another reason that such companies might have an economic incentive to generate less electricity than their maximum capacity, or maybe none at all. This is because there is a market for the wood pellets, and the power companies often sell their stock. Lynemouth’s revenue from biomass sales grew substantially in recent years, from £3.8 million in 2021 to £94 million in 2022 and £85 million in 2023.
In other words, it can be profitable for a biomass operator to sell the wood it receives, or to game the system by curtailing production at certain times. Olwyn Joy Hocking, of the campaign group Climate Action Newcastle, is frustrated at the way the taxpayer is propping up Lynemouth Power. ‘Those incentives are going to enrich a billionaire.’
The billionaire in question is the Czech entrepreneur and Anglophile Daniel Křetínský, the 33rd-richest person in the UK, according to the 2024 Sunday Times Rich List. With a net worth of £6 billion, Křetínský’s holdings include significant portions of West Ham football club, Sainsbury’s and the Royal Mail.
But Křetínský’s fortune was largely built on energy. He is the CEO of EPH, an energy investment conglomerate. EPH is a media-shy private company that is not required to communicate publicly the way a national utility would.
(Lynemouth Power and EPUKI, EPH’s UK division, declined to answer questions for this article.)
Because it’s smaller and privately owned, Lynemouth has largely evaded the scrutiny attached to fellow biomass plant Drax, the UK’s largest biomass power station and the UK’s largest single source of carbon emissions. Amid other controversies, in 2024 Drax was fined £25 million by energy regulator Ofgem for inaccurately reporting its wood sources. Drax supplies Lynemouth, and Biofuelwatch calls Lynemouth ‘a smaller version of Drax’.
FURTHER FUNDING
Some in the UK government believe that the renewable classification for wood pellets is outdated. ‘When biomass was classified as renewable energy, we didn’t have the information,’ says Baroness Sheehan, who chairs the House of Lords Environment and Climate Change Committee. ‘We are now in a place where we know we need to act… I think it’s a false premise to treat it as renewable.’
There is precedent for ending taxpayer financing of this highly controversial industry. In January 2025, the South Korean government announced that it would begin phasing out biomass subsidies, following revelations about the industry’s links to deforestation in other countries. ‘South Korea is taking the critical and necessary step to curb biomass emissions by ending subsidies for industrial-scale wood biomass plants, while the UK, the world’s biggest importer of wood pellets, is still pumping billions of taxpayers’ money into subsidies for major emitters – Lynemouth and Drax,’ says Gemma Hoskins, senior UK director at the environmental non-profit Mighty Earth.
Both Drax and Lynemouth have been pinning hopes for further government funding on BECCS (bioenergy with carbon capture and storage), a technology that extracts energy from biomass power production and injects CO2 deep underground. The aim is to produce energy without the carbon cost. However, critics argue that carbon capture remains an expensive and insufficiently tested strategy that may allow polluters to justify continuing their activities.
The biomass lobby group Biomass UK and its parent organisation, the Renewable Energy Association, continue to lobby and advocate for carbon capture, as well as for transitional financial support. (Lynemouth is a member of both organisations.) Samantha Smith, the head of Biomass UK, says that the organisation has met with around 20 MPs in the last year, and that Biomass UK has helped the government develop its biomass strategy. An important element in justifying the continued financial support for Lynemouth is the jobs that the power station offers.
David Herbert, a local Green Party councillor for Cleadon & East Boldon, just a few miles away from the Port of Tyne, told us he would much prefer wind or solar power to be creating jobs rather than the heavily subsidised biomass sector.
In February, the Department for Energy Security and Net Zero (DESNZ) announced an extension of subsidies for Drax from 2027 to 2031, but with a reduction compared to previous periods. The smaller subsidies appear to be a compromise measure. When contacted for comment, DESNZ did not commit to post-2027 plans for Lynemouth. However, observers expect Lynemouth to be treated in a similar manner to Drax.
Puzzlingly, the Drax announcement came before the end of an inquiry by the Public Affairs Committee into government support for biomass. The inquiry is expected to take a close look at Lynemouth’s sustainability claims.
‘The UK government must listen to the growing chorus of concern about biomass,’ Hoskins of Mighty Earth urges. ‘Pulling the plug on subsidies would reveal that these plants are financially unviable. Biomass makes no sense – for UK taxpayers or for the climate.’
The concerns about Lynemouth, and the environmental impact of burning wood for power, are replicated across Europe. A joint investigation spanning five countries, Biomass: The Green Mirage, has documented a pattern of EPH-owned biomass plants using unsustainable, uncertified or unreported wood sources. The subsidiaries also have similar models for generating profit: the plants depend on public subsidies and, in some cases, practices such as turning power generation on and off.
This article is part of BIOMASS: THE GREEN MIRAGE, a months-long investigation by a cross-border team of journalists from five countries: Sofia Cherici and Gianluca Liva (Italy); Aïda Delpuech (France); Ann Esswein (Germany); Christine Ro (UK); and Martin Vrba (Czech Republic). This investigation was developed with the support of Journalismfund Europe.
