Drax is enabling a zero carbon, lower cost energy future

About Drax

Drax Group is a renewable energy company engaged in renewable power generation, the production of sustainable biomass and the sale of renewable electricity to businesses.

Drax operates a generation portfolio of sustainable biomass, hydro-electric and pumped hydro storage assets across four sites in England and Scotland. It is the UK’s largest source of renewable electricity. The company also operates a global bioenergy supply business with manufacturing facilities at 13 sites in the United States and Canada, producing compressed wood pellets for its own use and for customers in Europe and Asia.

The Group employs 3,400 people in the UK and North America.

Enabling a zero carbon, lower cost energy future is Drax Group’s purpose and in 2019, it announced a world-leading ambition to be carbon negative by 2030, using Bioenergy with Carbon Capture and Storage (BECCS) technology to remove carbon dioxide (CO2) from the atmosphere at scale whilst delivering reliable renewable electricity.

Our strategic aims

A Global leader in sustainable biomass pellets

Drax believes that the global market for sustainable biomass will grow significantly, creating opportunities for sales to third parties in Asia and Europe, BECCS, generation and other long-term uses of biomass. Delivery of these opportunities is supported by the expansion of the Group’s biomass pellet production capacity.

A Global leader in negative emissions

Drax Group CEO Will Gardiner in the control room at Drax Power Station

Drax Group CEO Will Gardiner in the control room at Drax Power Station

Subject to the right regulatory environment, Drax plans to transform Drax Power Station into the world’s biggest carbon capture project using BECCS to permanently remove 8Mt of CO2 emissions from the atmosphere each year by 2030. The project is well developed, the technology is proven and an investment decision could be taken in 2024 with the first BECCS unit operational in 2027 and a second in 2030, subject to the right investment framework.

A UK leader in dispatchable, renewable generation

The UK’s plans to achieve net zero by 2050 will require the electrification of heating and transport systems, resulting in a significant increase in demand for electricity. Drax believes that over 80% of this could be met by intermittent renewable and inflexible low-carbon energy sources – wind, solar and nuclear. However, this will only be possible if the remaining power sources can provide the dispatchable power and non-generation system support services the power system requires to ensure security of supply and to limit the cost to the consumer.

Our integrated flexible and renewable value chain

Our activities are underpinned by safety, sustainability, operational excellence and expertise in our markets.

We across three principal areas of activity:

Pellet production

Morehouse BioEnergy in Louisiana

Drax’s Morehouse BioEnergy compressed wood pellet plant in northern Louisiana

A leading producer of wood pellets from sustainable low-value commercial forestry residues.

Our pellets provide a sustainable, low carbon fuel source that can be safely and efficiently delivered through our global supply chain. Drax’s Generation business uses these pellets to make flexible, renewable electricity for the UK.

Based in North America, this part of our business aims to increase capacity from 1.6Mt to 5Mt and reduce production costs by 2027, to support a long-term future for sustainable biomass.

Adjusted EBITDA 2020

Pellets produced 2020

Production cost 2020

£52m

1.5Mt

$153/t

(2019: £32m) (2019: 1.4Mt) (2019: $161/t)

Generation:

A portfolio of flexible and renewable UK power generation.

Drax Power Station with biomass storage domes lit up

Our multi-site, multi-technology portfolio of flexible, low-carbon and renewable UK power assets (including biomass and hydro generation) provides power and system support services to the electricity grid.

This portfolio provides long-term earnings stability and opportunities to optimise returns from the transition to a low-carbon economy.

Drax is the UK’s largest single source of renewable electricity by output and is developing an option for carbon negative electricity using bioenergy carbon capture and storage (BECCS).

The Group also has options for system support gas assets and a long-term option for the potential expansion of pumped storage.

Adjusted EBITDA (including discontinued operations) 2020

% renewable 2020

System support and optimisation 2020

£446m

77%

£118m

(2019: £408m) (2019: 79%) (2019: £120m)

Customers

A leading supplier of renewable energy solutions to industrial and business customers.

Electric vehicle charging at Haven Power in Ipswich

Electric vehicle charging at Drax in Ipswich

Our Customers business is principally focused on renewable electricity sales to industrial and corporate customers. The business also offers non-generation system support and energy management services,
in addition to providing a route to market for many smaller embedded renewable generators.

Adjusted EBITDA 2020

£(39)m

(reflecting the negative impact of Covid-19 with a £60m impact.)
(2019: £17m)

 

Where we operate