The U.K.'s largest coal-fired plant will become western Europe's largest clean-energy producer with the announcement of Drax Group Plc's $1 billion effort to transition from burning coal to burning wood.
“We see a key part of our future as converting from essentially a coal station to a biomass station,” Chief Executive Officer Dorothy Thompson told Bloomberg. “It will take Drax from being the largest carbon emitter by site in the U.K. to being, probably, one of the largest renewable plants in the world.”
By June, one of the site's six units will start burning wood pellets with two others to follow shortly after. Through 2017, Drax will spend up to 700 million pounds ($1.13 billion) upgrading its boilers in England—an effort that will also require ordering millions of tons of biomass from around the world and building facilities to store the fuel.
The supply chain efforts are already in motion: farmers and foresters have been hired and the utility is looking into building pellet plants in North America.
“A lot of the infrastructure and capital is already there,” Drax's Financial Director Tony Quinlan told Bloomberg. “The beauty of it is you’re taking something that exists already. You’re modifying very efficient coal-fired power stations.”
On the road to meeting European Union air-pollution rules and avoiding greenhouse-gas costs, Drax and others like RWE AG and Dong Energy are moving their coal-fired plants off fossil fuels.
Coal, the most polluting fossil fuel, generates about 41 percent of global electricity, and just under 50 percent of electricity in Britain. If all goes according to plan, four percent of the country's power will come from burning wood pellets under Drax's changes alone.
By 2016, around half of Britain's coal-fired plants are scheduled to close, with nuclear reactors to follow by 2035. Analysts see biomass playing a critical role in meeting climate-change targets and maintaining the nation's power supply as those transitions take place.
By. Carin Hall