Drax fires up plans for fleet of pellet plants to supply UK biomass operations

Drax is poised to begin construction of the first of three new wood pellet plants in North America later this month, as the energy firm pushes forward with its plans to self-supply its biomass power operations in the UK.

The company is investing $40m in developing the first "satellite" pellet facility in Arkansas, USA, where it expects to create around 30 new direct jobs in the local community, with commissioning slated to begin in October, it announced late last week.

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Co-located beside an existing sawmill in Leola, Grant County, so as to reduce transport and infrastructure costs, the plant is expected to produce around 40,000 metric tonnes of biomass pellets each year, in part by using sawdust and other residual by-products from the sawmill, Drax said.

It is the first of three pellet plants in the pipeline for Drax in North America, which once operational will have a combined capacity to produce around 120,000 tonnes of biomass pellets each year for its North Yorkshire power plant, where the company is testing carbon capture technology.

The move forms part of Drax's broader strategy to increase its self-supply of pellets to five million tonnes each year by 2027, as the company sets its sights on becoming a 'negative emissions' company by the end of the decade, by removing more carbon from the atmosphere than its generates.

The announcement follows the firm's acquisition of leading wood pellet producer Pinnacle Renewable Energy last month in a deal worth around £436m, providing Drax with a major biomass trading business in North America, Europe, and Asia.

Drax CEO Will Gardiner said the investment in Arkansas would "play an important role in combatting climate change, supporting Drax to increase the amount of sustainable biomass we produce as part of our plans to pioneer bioenergy with carbon capture and storage".

"By using sustainable biomass, we have displaced coal-fired power generation, reduced carbon emissions and provided renewable electricity for millions of homes and businesses in the UK," he said.

By shifting its core business away from coal power towards bioenergy with carbon capture and storage (BECCS), Drax argues it can produce net negative emissions, and it is expecting significant global growth and interest in the biomass market in the coming years as a result.

Drax has been testing BECCS technologies at its North Yorkshire plant for several years as part of its plans to capture millions of tonnes a year of the CO2 emitted at two of the facility's existing 630MW biomass power units.

However, Drax's strategy remains highly contentious, with many environmental groups arguing that delivering BECCS at scale could have substantial negative land-use impacts, and that it remains unclear as to whether the technology can deliver on its promised emissions reductions.

Questions have also been raised about the sustainability credentials of Drax's North American biomass feedstock, although the company insists it operates a stringent responsible sourcing policy for its feedstock.