The Scottish Government has cut subsidies for biomass power plants that generate over 15MW of electricity as part of its Renewables Obligation (RO) scheme announced in October 2012.
Biomass facilities which have over 15MW of capacity will get support only if they function as combined heat and power (CHP) plants, reported Energy Live News.
Scotland Energy Minister Fergus Ewing said, "We have made clear our concerns over competition for a finite supply of wood and our belief that there should be a greater focus on biomass in smaller scale energy projects wherever possible and the responses to our consultation reflected that."
Ewing further added that the government is removing support for high capacity biomass plants that do not generate quality combined heat and power.
The decision was taken to balance business opportunities in the forest supply sector with new capacity additions, without affecting existing users.
The Renewables Obligation (RO) scheme provides support for renewable energy generation, particularly from biomass and solar to reduce energy costs to consumers over the long term.