Drax Group could create thousands of jobs as part of strategy to generate secure, renewable power
In a trading update, North Yorkshire-based Drax said the group’s biomass, pumped storage and hydro assets have continued to support UK security of supply, providing power system stability at a time of higher gas prices and volatility on the power system.
Drax Group’s chief executive Will Gardiner said: “Drax plays a critical role in supporting the UK energy system, generating more renewable power by output than any other company.
"During the difficult winter ahead, we will continue to optimise our biomass operations to ensure that more renewable power is available, when the country needs it most.
“As governments around the world increasingly look to introduce supportive policies for carbon removals, Drax is considering more exciting global opportunities for deployment of BECCS (Bioenergy with carbon capture and storage), advancing our ambition to be a leader in this critical technology.
“Drax is a growing, international business at the heart of the green energy transition and we are accelerating our plans to invest billions of pounds in critical renewable energy and carbon removal technologies which could create thousands of jobs and generate the secure, renewable power that this planet urgently needs.”
In a statement, Drax said the group’s sustainable biomass pellet business has continued to support efforts to optimise biomass power generation and security of supply in the UK at times of higher demand this winter.
The statement added: “As outlined at the group’s half year results, in July 2022, there has been an incremental increase in costs in North America, primarily in transportation and utility costs.
"These cost increases have continued in the second half of 2022 and taken together with costs incurred in providing supply-side flexibility, production costs for the business are expected to be higher in 2022 and 2023. These increased costs have been considered in an adjusted transfer price, which was implemented in the second half of the 2022.
“Drax remains focused on opportunities to reduce the cost of biomass but will balance this against the need to optimise its supply chain to deliver value for the Group.
“In the second half of 2022, Drax commissioned a second satellite plant at Russellville in Arkansas and in August 2022, Drax acquired a pellet plant in Princeton, British Columbia, from Princeton Standard Pellet Corporation.
The statement added: “In addition, following commissioning in the first half of 2022 both the Demopolis (Alabama) and Leola (Arkansas) pellet plants have continued to work towards full production and these four plants combined will add over 500kt of full production capacity.”
Earlier this week, it was revealed that Britain’s electricity grid operator had told two of its coal-fired power stations to stand down after preparing them to generate electricity amid pressure from freezing weather conditions.
National Grid said it had asked the winter “contingency” plants to prepare for operation to “give the public confidence in Monday’s energy supply”.
It said the plans meant the coal-fired stations could be used as “tools for additional contingency” as needed to allow the network to run as usual. However, it told the units they would not be needed later on Monday as there was “adequate available contingency” to power households across the country that evening. The grid had prepared two Drax stations in Selby, North Yorkshire for use on Monday evening, which are among five put on standby under so-called winter contingency contracts, with others run by EDF and Uniper.