UPDATE: Drax has completed the acquisition of biomass producer Pinnacle.
The company said that increasing self-supply and reducing biomass production costs would pave the way for it to deliver bioenergy with carbon capture and storage (Beccs). It said, “By becoming a world leader in Beccs, Drax can deliver on its purpose of enabling a zero carbon, lower cost energy future, and achieve its ambition to become a carbon negative company by 2030. Drax will seek to export its BECCS expertise around the world to support global efforts to address the climate emergency.”
Will Gardiner, Drax chief executive, added: “Negative emissions from Beccs are vital if we are to address the global climate emergency. BECCS will also provide a significant share of the renewable electricity needed in a net zero economy, support green jobs and drive growth in a post-COVID recovery.”
From 20 February: Drax subsidiary Amite Bioenergy has paid a US$2.5 million fine to the Mississippi Department of Environmental Quality after admitting that its US biomass subsidiary Amite Bionenergy has been exceeded pollutant limits. Local environmental organisations said this was “the largest known penalty against such a facility,” which hademitted three to four times the emissions authorised..
The biomass processing plant, which produces dried wood pellets for combustion in Drax’s Yorkshire power station, had exceeded emission limits on so-called volatile organic compounds since at least 2016.
In 2019 the company promised to install additional technology, a regenerative catalytic oxidiser (RCO), that would enable the facility to meet emission limits. But the technology was not installed as promised by September 2019, according to an ‘agreed order’ dated November 2020 from the Mississippi Department of Environmental Quality.
The RCO was said to be in operation a year later, but the facility is required to limit production and will be subject to penalties of $80,000 per month if the RCO is not in operation from July 2021.
The record-breaking penalty comes as Drax announced the acquisition of major Canadian biomass producer Pinnacle, as part of a strategy to become a major global biomass supplier and multiply its biomass ‘self supply’ from 1.6Mt/year to 5Mt/yr.
Pinnacle’s biomass operations, which are in Western Canada and the Southeastern US, are expected to increase from 2.5Mt/yr to 2.9Mt/yr with the commissioning of new capacity in 2021.
Drax said Pinnacle’s production capacity “provides a strong position from which to serve the growing demand for biomass in Asian markets” and help build a merchant biomass market. In 2018 and 2019, Pinnacle entered into 12 new long-term contracts in Japan and South Korea, totalling over 1.3Mt/yr.
The UK company also said the acquisition would help reach its target cost of biomass generation to £50/MWh by 2027. Pinnacle’s production cost is currently US$124/t, compared to Drax’s 2019 production cost of US$161/tonne. Drax will pay C$385 million (£226 million) for Pinnacle.
Meanwhile Drax has cancelled plans to build new gas-fired plant at its Yorkshire site. It completed the £188M sale of four UK gas-fired power stations on 31 January 2021.
Drax insists its biomass is sustainably sourced but that does not convince campaigners. It is a ‘priority issue’ for the US’s Southern Environment Law Centre, which is campaigning with other US and UK organisations to cut UK biomass subsidies (see https://www.cutcarbonnotforests.org). SELC says biomass shoud be restricted to wood waste such as sawdust and clean construction debris or feedstocks where a full life-cycle carbon analysis shows a clear net climate benefit. See its data on US biomass production here.
It wants: an end to UK and EU subsidies; restrictions on the use of whole trees and the conversion of native forests into energy crops and protection for national forests and ‘old growth’ areas.