Yorkshire power generator Drax said it has been provisionally successful in its bid to buy Louisiana Pellets in a move that will boost its green credentials.
The auction price was £28m and Drax said a court hearing to approve the auction result is scheduled to take place in early April, with completion of the sale expected by the end of the month.
The group added that the process for the sale of Texas Pellets’ assets has been postponed and that Drax remains an interested party in buying them.
Drax announced in February that it hoped to acquire out of bankruptcy the operating assets of the two US-based pellet manufacturers.
Drax, which operates a giant power station near Selby in North Yorkshire, has indicated its intention to expand its self-supply compressed wood pellet operations to support 20 to 30 per cent of its generation requirement.
The acquisition of these American assets would help Drax to meet this target.
Drax said that 65 per cent of its electricity was generated from sustainable compressed wood pellets last year as it forges ahead with plans to ditch coal in favour of biomass.
This was up from 43 per cent in 2015, bringing it closer to its long term goal of being 100 per cent biomass.
The firm, once one of the biggest polluters in Europe, saw it is now producing enough renewable electricity to power Sheffield, Leeds, Liverpool and Manchester.
Andy Koss, chief executive of Drax Power, said the firm now has three units, out of six, fully running on biomass.
“We stand ready to convert more and we’re in discussions with the Government. If we got the green light we could convert fully to biomass within two years,” he said.
“The Government remain supportive of biomass. They recognise the achievements we’ve made.”
Drax described 2016 as a pivotal year for the company despite very challenging power and commodity markets. Its biomass units delivered a record level of renewable electricity.