Drax calls for more UK biomass support

• 13 years ago (2011-02-24)
• Junior Isles

Europe 1061 Renewables 751

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Drax Group, operator of the UK’s biggest power station, has repeated a plea for more UK Government support for biomass burning, as it reported higher annual profits and sales.

North Yorkshire-based Drax, which supplies around seven per cent of the UK’s electricity, was buoyed in 2010 by cold weather which boosted power sales. But the plant warned the narrowing gap between the price of power and the cost of electricity generation, due to rocketing coal prices, may dent earnings this year.

In the face of tough regulations aimed to clean up electricity generation, the 4000 MW coal fired power station is trying to lengthen its lifespan by adding biomass-burning capacity. It believes government should do more to recognise the role of organic plant-based biomass as a fuel in power generation, by paying more generous subsidies.

“Most people think of Drax as a coal generator but actually we have become a quite significant renewable generator,” said chief executive Dorothy Thompson. “Biomass co-firing gets a quarter of the support of offshore wind. With more support, but not as much as offshore wind, we could deliver 50 per cent more renewable output.”

Drax believes it generated about seven per cent of the UK’s renewable power in 2010 by burning biomass, which ranged from wood chips to elephant grass. That equated to about 904, 000 tonnes of biomass, more than double a year earlier. However, it burned only about half of its biomass capacity – six per cent instead of 12.5 per cent – because insufficient subsidies made it uneconomical to burn more.

At full capacity, Drax says its output would be the equivalent of more than 600 wind turbines and a saving of 2.5 million tonnes of carbon a year.

It fitted extra biomass co-firing capacity in 2010, at a cost of £80 million, and also has plans for three new 290 MW dedicated biomass plants under a £2 billion investment. But Ms Thompson said these will not go ahead until support levels are clear, and welcomed an ongoing government review of subsidies.

Government plans to reform support for renewables through the introduction of a feed-in tariff (FIT), and Drax believes its proposals will create more “level playing field for investment in renewables”.

Ms Thompson said: “With appropriate regulatory support, we stand ready to expand our biomass capability significantly.”

Drax burned 9.4 million tonnes of coal during 2010, compared with 8.2 million tonnes in 2009. Its annual generation of 26.4 TWh compared with 22.6 TWh in 2009. Underlying profits rose to £390.6 million from £355 million in 2009 and revenues grew 11.6 per cent to £1.65 billion.

It was boosted by power demand hitting record levels during the UK’s freezing weather in December. Drax also hailed its record efficiency, which drove outages down to just 3.4 per cent – its best ever rate.

But chairman Gordon Horsfield warned: “The outlook, however, is challenging as we face pressure on coal generation margins due to today’s commodity market conditions.”