Drax aims to double its production and sales of biomass pellets by 2030, the company revealed.
Drax announced a target to double its production of biomass pellets from 4 million tonnes per annum (tpa) to 8 million tpa by 2030. The company also aims to boost pellet sales to third parties, targeting 4 million tpa by 2030 – currently, sales are at 2 million tpa. Strategic capital investment is expected to be in the region of £3 billion (€3.5 billion) between 2022 and 2030.
The company is also progressing with its plans to implement bioenergy with carbon capture and storage (BECCS) at its power station in North Yorkshire. The firm is targeting 8 million tpa of negative CO2 emissions by 2030.
“Drax has made excellent progress during 2021 providing a firm foundation for further growth,” said Drax CEO Will Gardiner. “We have advanced our BECCS project – a vital part of the East Coast Cluster that was recently selected to be one of the UK’s two priority CCS projects.
“We’re now setting out a strategy to take the business forward, enabling Drax to make an even greater contribution to global efforts to reach net zero.
“We believe Drax can deliver growth and become a global leader in sustainable biomass and negative emissions and a UK leader in dispatchable, renewable generation.
“We aim to double our sustainable biomass production capacity by 2030 – creating opportunities to double our sales to Asia and Europe, where demand for biomass is increasing as countries transition away from coal.
“As a global leader in negative emissions, we’re going to scale up our ambitions internationally. Drax is now targeting 12 million tonnes of carbon removals each year by 2030 by using BECCS. This includes the negative emissions we can deliver at Drax Power Station in the UK and through potential new-build BECCS projects in North America and Europe, supporting a new sector of the economy, which will create jobs, clean growth and exciting export opportunities.”
Drax has 13 operational pellet plants with a nameplate capacity of around 4 million tpa, plus an additional two plants currently in the commissioning phase and other developments/expansions, which will increase this number to 5 million tpa once complete.
Now targeting 8 million tonnes of production capacity by 2030, Drax will need to develop over 3 million tonnes of new biomass production capacity. To achieve this goal, the company is developing a pipeline of organic projects, principally focused on North America. It expects to take a final investment decision on 0.5-1 million tonnes of new capacity in 2022, targeting returns significantly in excess of the group’s cost of capital.
Underpinned by this expanded production capacity, Drax aims to double sales of biomass to third parties to 4 million tonnes by 2030, developing its presence in Asia and Europe, facilitated by the creation of new business development teams in Tokyo and London.