Pull to refresh
Logo
UK ends subsidies for small-scale biomass plants, putting poultry-litter power stations at risk

UK ends subsidies for small-scale biomass plants, putting poultry-litter power stations at risk

Rule Changes

Renewables Obligation support expires from 2027 through 2037 with no successor scheme planned

3 days ago: Melton warns of plant closures and job losses

Overview

Updated 3 days ago

Energy Minister Michael Shanks confirmed on September 1 that the government will not offer successor subsidies for small-scale biomass generators as Renewables Obligation (RO) support expires. The category covers plants under 100 megawatts, including dedicated biomass, anaerobic digestion, sewage gas, and energy-from-waste facilities; support phases out from 2027 through 2037.

The decision threatens Melton Renewable Energy, which runs three poultry-litter plants at Thetford, Eye, and Westfield processing 600,000 tonnes annually. Those plants have received £649 million in RO payments since 2010-11, and all five Melton sites have received £1.186 billion; the company says closure consultations could begin in December. The Department for Environment, Food and Rural Affairs (Defra) is drafting new rules for spreading poultry litter on farmland, a likely fallback that risks water pollution.

Why it matters

If these plants close, 600,000 tonnes of poultry waste annually loses its disposal route, and the grid loses a small but steady power source.

Questions about this story

Free account needed to ask — your question is kept and asked for you right after sign-up. Answers are public.

No questions yet — be the first to ask.

Key Indicators

£649M
Total RO subsidies to Melton's three poultry-litter plants since 2010-11
Combined payments to the Thetford, Eye, and Westfield plants, roughly £43 million per year.
£1.186bn
Total RO subsidies to all five Melton sites since 2010-11
Includes two other plants fuelled by straw and meat-and-bone meal. Subsidies made up 54% of Melton's biomass division turnover in 2024-25.
600,000 tonnes
Poultry litter processed annually by Melton
Across the three plants. Subsidies made up 54% of the biomass division's turnover in 2024-25.
405 GWh
Electricity generated by Melton plants in 2025
Roughly 0.13% of UK electricity demand — modest output for the level of subsidy.
100 MW
Capacity threshold for small-scale biomass definition
All plants below this size lose RO successor support.
2027-2037
Support phase-out window
Different assets reach end-of-support at different points across the decade.

Voices

Curated perspectives — historical figures and your fellow readers.

Ever wondered what historical figures would say about today's headlines?

Sign up to generate historical perspectives on this story.

People Involved

Organizations Involved

Timeline

May 2024 September 2026

5 events Latest: 3 days ago
Tap a bar to jump to that date
  1. Melton warns of plant closures and job losses

    Latest Corporate

    Company tells staff consultation on closures and redundancies may begin in December; TBIJ and GRILLED publish investigations.

  2. Minister confirms no successor scheme for small-scale biomass

    Policy

    Michael Shanks writes to the energy security committee: RO support expires from 2027 through 2037 with no replacement.

  3. Massachusetts Senate removes biomass from clean energy standards

    Legislation

    Parallel development in the US: Senate amendment eliminates public subsidies for wood combustion energy, affecting a proposed Springfield plant.

  4. Melton warns parliament of closure risk

    Corporate

    In written evidence to the Energy Security and Net Zero Committee, Melton said a lack of transitional support from 2027 could have 'catastrophic' knock-on effects for rivers and soil.

  5. Government opens consultation on large-scale biomass transition

    Policy

    DESNZ begins consulting on transitional support for large-scale generators (over 100 MW), signaling separate treatment from small-scale.

Scenarios

1

Melton plants close by mid-2027, triggering a poultry-waste disposal crisis

Likely Resolves by Q2 2027

Discussed by: The Bureau of Investigative Journalism, GRILLED

If Melton proceeds with closures in December and the plants shut before RO payments end in March 2027, 600,000 tonnes of poultry litter annually loses its processing route. Farmers either stockpile waste or spread excess on farmland, risking runoff into waterways. DEFRA says existing frameworks cover this, but enforcement capacity is untested at this scale.

2

Partial reprieve: some small-scale biomass assets find alternative revenue

Possible Resolves by Q1 2027

Discussed by: Minister's letter noting biomethane capture schemes

Some assets may transition to other revenue streams. The minister's letter explicitly notes that biomethane capture and other bespoke schemes could support specific plants. Plants with multi-purpose value, such as combined heat and power serving industrial parks, might survive on commercial contracts even without RO income.

3

Government reverses or amends position after political pressure

Unlikely Resolves by Jan 31, 2027

Discussed by: Parliamentary committee scrutiny, industry lobbying

The Energy Security and Net Zero Committee may push back after investigating. If MPs conclude the poultry-waste risk is understated or security-of-supply assumptions are wrong, they could pressure DESNZ for a limited extension or transitional arrangements. The minister's letter was in response to committee questions, signaling active scrutiny.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

November 2015 - October 2024

UK Coal Phase-Out (2015-2024)

The UK announced in 2015 it would close all coal-fired power stations by 2025, later tightened to 2024. Subsidies and capacity payments were progressively withdrawn, and plants closed on schedule across the decade. Ratcliffe-on-Soar, the last coal plant, shut in October 2024.

Then

No major security-of-supply failures occurred as gas and renewables filled the gap, vindicating the phase-out approach.

Now

Established a template for ending subsidies for legacy generation: announce dates far in advance, hold the line, rely on market signals for replacement.

Why this matters now

The biomass phase-out follows the coal playbook: long-notice subsidy removal, with the government betting the market absorbs the loss without reliability issues.

2015-2026

US Biomass Subsidy Battles (2015-2026)

Massachusetts and other states have spent over a decade debating whether wood-burning and biomass plants deserve clean-energy subsidies. The Massachusetts Senate in August 2026 voted to remove biomass from clean energy standards, arguing lifecycle emissions are worse than fossil fuels for some feedstocks.

Then

Proposed Springfield biomass plant lost its subsidy base, with legislators calling the vote the 'final nail in the coffin.'

Now

A cross-Atlantic convergence on biomass skepticism: governments on both sides treating small-scale biomass as high-cost, questionable-benefit generation.

Why this matters now

The UK decision and Massachusetts action reflect a shared reassessment of biomass's role in decarbonization, though the UK is more focused on cost than emissions accounting.

Sources

(12)