Drax plans to double the production and sales of wood pellets burnt for fuel, and said it remained on track to close its coal units despite needing to fire them up during the global energy crunch.
The UK power company said in a trading update that it aimed to increase biomass pellet production to 8m tonnes per year by 2030, from 4m tonnes now, half of which would be sold to third parties.
With the right government support in place, Drax said it would invest £3bn over the next decade to grow its biomass business, and pair the fuel with carbon capture technology in an effort to generate large-scale “negative emissions”.
Bioenergy with carbon capture and storage (BECCS) “is a trillion-dollar market opportunity”, said chief executive Will Gardiner. “By the end of the decade we estimate that Drax could be permanently removing 12m tonnes of carbon from the atmosphere each year.”
Drax has aimed to reposition itself and BECCS as essential parts of the UK’s decarbonisation plan, and hopes to install the technology at one of its units in 2027. The UK government will publish a biomass strategy next year setting out the extent to which it expects BECCS to play a role in the race to net zero.
Drax has converted four of the six units at its Yorkshire power station from coal to wood biomass, and said on Wednesday it anticipated strong growth in demand for the pellets in Asia and Europe in the years to 2030.
However, critics are highly sceptical about the viability of deploying BECCS at scale, and about the claim that sustainably sourced biomass is genuinely carbon neutral.
Giving evidence to a parliamentary committee last week, Daniel Quiggin, a senior research fellow at Chatham House, warned that using large areas of land to grow biomass fuels risked driving up global food prices.
Strengthening on its plan to move permanently away from coal and rebrand itself as a clean energy company, Drax said on Wednesday that it remained on track to close its remaining coal units in September 2022 — despite having said earlier this year that the plans might be delayed.
The company was asked to fire up the two units this year in September and November as soaring energy prices caused havoc in the UK and elsewhere. But those “limited operations” did not result in “any material increase” in Drax’s carbon emissions, it said.
Drax has come under repeated fire from climate campaigners in recent years for its increasing focus on biomass energy. In October, the Forest Litigation Collaborative, an umbrella group, lodged a complaint against the company with the OECD, alleging that Drax was misleading consumers about its green credentials.
Drax is also being sued by the UK’s Health and Safety Executive over allegations that it exposed workers to unsafe levels of dust from the burning of wood pellets. The company disputes the claim and has pleaded not guilty in the case, which is continuing.