Author: Alice Roberts

Six-month extension of coal operations at request of UK Government

6 July 2022

Investors
View of Drax Power Station

RNS Number : 5919R
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)

In response to increased pressure on European gas markets and associated concerns about electricity security of supply in the UK this winter, the UK Government has asked owners of legacy coal-fired generation assets, including Drax, to work together with National Grid to temporarily extend the life of their coal generation assets to March 2023.

At the request of the UK Government, Drax has now entered into an agreement with National Grid – in its capacity as the electricity systems operator – pursuant to which its two coal-fired units at Drax Power Station will remain available to provide a “winter contingency” service to the UK power system from October 2022 until the end of March 2023. The units will not generate commercially for the duration of the agreement and only operate if and when instructed to do so by National Grid.

Under the terms of the agreement, Drax will be paid a fee for the service and compensated for costs incurred, including coal costs, in connection with the operation of the coal units in accordance with the agreement.

Will Gardiner, Drax’s Group CEO, said:

“At the request of the UK Government, Drax has agreed to delay the planned closure of its two coal-fired units and help bolster the UK’s energy security this winter.

“Drax has played a central role in ensuring Britain’s energy security over several decades and our workforce is proud to be providing this critical support to the UK energy system.

“Drax is the UK’s largest generator of renewable power, producing enough reliable, renewable electricity for 5 million households from our sustainable biomass and hydro operations and we remain committed to delivering a coal-free future.

“The UK’s long-term energy security depends on investment in innovative green technologies like bioenergy with carbon capture and storage (BECCS), which provides reliable, renewable power whilst permanently removing CO2from the atmosphere.

“Drax aims to invest billions of pounds developing BECCS in the UK by 2030, provided that the UK Government has in place policies to support the feasibility and delivery of negative emissions technologies, which it has committed to developing this year.”

Drax ended commercial operations on its two-remaining coal-fired generation units in March 2021, and formal closure was planned for September 2022, following the fulfilment of the Group’s Capacity Market obligations on these units.

A limited six-month extension to March 2023 is not expected to result in a material level of coal generation(1). Throughout 2021, coal-fired generation accounted for 3% of the Group’s generation output and in the first three months of 2022, this was less than 1%, with the balance from renewables – sustainable biomass, pumped storage and hydro.

The decision to end coal generation supports the Group’s purpose of enabling a zero-carbon, lower-cost energy future and the transition to a flexible, renewable generation model. This has led to a more than 95% reduction in the Group’s Scope 1 and Scope 2 carbon emissions since 2012 and enabled Drax to become the UK’s largest source of renewable electricity by output.

Investment in renewables

To date, Drax has invested over £2 billion in renewables and UK security of supply, with options for a further £3 billionto be invested this decade, subject to the right investment environment. These investment options include the development of negative emissions technologies and pumped storage, which the UK Government has said are necessary to decarbonise the electricity generation sector by 2035 and reach net zero by 2050.

No expected impact on BECCS

Drax continues to expect to take a final investment decision on its Drax Power Station BECCS project in 2024, subject to the right investment environment and, in 2022, is investing incrementally in the development of this option. This includes the removal of certain coal infrastructure. A six-month extension of coal is not expected to impact on the timing of a final investment decision or intended commissioning date for the project. Site preparation works for BECCS are ongoing and will accelerate following formal closure of the coal units in March 2023.

The UK Government recognises the important role which BECCS has to play in delivering net zero, requiring at least 5Mt of CO2 per year from BECCS and other engineered Greenhouse Gas Removals (GGR) by 2030. To support this ambition, in July 2022, the UK Government published a consultation on engineered GGR’s. Separately, in order to develop the financial model required to support BECCS – and reflective of its advanced technological readiness and the co-benefits of both power and negative emissions – the UK Government is expected to publish a power BECCS business model consultation during summer 2022.

The Group believes that negative emissions and BECCS represent a trillion-dollar global market opportunity and is separately continuing to develop options to deliver 4Mt of negative CO2 emissions each year from new-build BECCS outside of the UK by 2030.

Notes:

(1)   Drax will work with National Grid to source up to approximately 400,000 tonnes of additional coal (which together with current stocks is enough for c.1TWh of electricity generation) to deliver the service, and will only operate if and when instructed to do so by National Grid.

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 7730 763 949

Media:

Drax External Communications: Ali Lewis

+44 (0) 7712 670 888

Website: www.Drax.com

END

An introduction to carbon accounting

12 May 2022

Sustainable business

Key takeaways:

  • Tracking, reporting, and calculating carbon emissions are a key part of progressing countries, industries, and companies towards net zero goals.
  • As a newly established discipline, carbon accounting still lacks standardisation and frameworks in how emissions are tracked, reduced, and mitigated.
  • The main carbon accounting standard used by businesses is the Greenhouse Gas (GHG) Protocol, which lays out three ‘Scopes’ businesses should report and act upon.
  • Carbon accounting evolves from reporting in the use of goals and timeframes in which targets are met.
  • Timeframes are crucial in the deployment of technologies like carbon capture, removals, and achieving net zero.

How can countries and companies find a route to net zero emissions? Many organisations, countries and industries have pledged to balance their emissions before mid-century. They intend to do this through a combination of cutting emissions and removing carbon from the atmosphere.

Tracking and quantifying emissions, understanding output, reducing them, and setting tangible targets that can be worked towards are all central to tackling climate change and reducing greenhouse gas emissions – especially when it comes to carbon dioxide (CO2). Emissions and energy consumption reporting is already common practice and compulsory for businesses over a certain size in the UK. However, carbon accounting takes this a step further.

“Carbon reporting is a statement of physical greenhouse gas emissions that occur over a given period,” explains Michael Goldsworthy, Head of Climate Change and Carbon Strategy at Drax. “Carbon accounting relates to how those emissions are then processed and counted towards specific targets. The methodologies for calculating emissions and determining contributions against targets may then have differing rules depending on which framework or standard is being reported against.”

Carbon accounting tools can help companies and counties understand their carbon footprint – how much carbon is being emitted as part of their operations, who is responsible for them, and how they can be effectively mitigated.

Like how financial accounting may seek to balance a company’s books and calculate potential profit, carbon accounting seeks to do the same with emissions, tracking what an entity emits, and what it reduces, removes, or mitigates. Carbon accounting is, therefore, crucial in understanding how countries and companies can contribute to reaching net zero.

A new space

How different organisations, countries and industries approach carbon accounting is still an evolving process.

“It’s as complex as financial accounting, but with financial accounting, there’s a long standing industry that relies on well-established practices and principles. Carbon accounting by contrast is such a new space,” explains Goldsworthy.

Regardless of its infancy, businesses and countries are already implementing standardised approaches to carbon accounting. Regulations such as emissions trading schemes and reporting systems, such as Streamlined Energy and Carbon Reporting (SECR) and the Taskforce on Climate Related Financial Disclosure (TCFD), are beginning to deliver some degree of consistency in businesses’ carbon reporting.

Other standards such as the GHG Protocol have sought to provide a standardised basis for corporate reporting and accounting. Elsewhere, voluntary carbon markets (e.g. carbon offsets) have also evolved to allow transferral of carbon reductions or removals between businesses, providing flexibility to companies in delivering their climate commitments.

The challenge is in aligning these frameworks so that they work together. For example, emissions within a corporate inventory or offset programme must be accounted for in a way that is consistent with a national inventory.

To date, these accounting systems have evolved independently with different rules and methodologies. Beginning to implement detailed carbon accounting, upon which emissions reductions and removals can be based, requires standardised understanding of what they are and where they come from.

Reporting and tackling Scope One, Two, and Three emissions

The main carbon accounting standard used by businesses is the Greenhouse Gas (GHG) Protocol. This voluntary carbon reporting standard can be used by countries and cities, as well as individual companies globally.

The GHG protocol categorises emissions in three different ‘scopes’, called Scope 1, Scope 2, and Scope 3. Understanding, measuring, and reporting these is a key factor in carbon accounting and can drive meaningful emissions reduction and mitigation.

Scope One – Direct emissions

Scope One emissions are those that come as a direct result of a company or country’s activities. These can include fuel combustion at a factory’s facilities, for example, or emissions from a fleet of vehicles.

Scope One emissions are the most straightforward for an organisation to measure and report, and easier for organisations to directly act on.

Scope Two – Indirect energy emissions

Scope Two emissions are those which come from the generation of energy an organisation uses. These can include emissions form electricity, steam, heating, and cooling.

A business may buy electricity, for example, from an electricity supplier, which acquires power from a generator. If that generator is a fossil-fuelled power station the energy consumer’s Scope Two emissions will be greater than if it buys power from a renewable electricity supplier or generates its own renewable power.

The ability to change energy suppliers makes Scope Two relatively straightforward for organisations to act on, assuming renewable energy sources are available in the area.

Scope Three – All other indirect emissions

Scope Three is much broader. It covers upstream and downstream lifecycle emissions of products used or produced by a company, as well as other indirect emissions such as employee commuting and business travel emissions.

Identifying and reducing these emissions across supply and value chains can be difficult for businesses with complex supply lines and global distribution networks. They are also hard for companies to directly influence.

Add in factors like emissions mitigations or offsetting, and the carbon accounting can quickly become much more complex than simply reporting and reducing emissions that occur directly from a company’s activities. Nevertheless, these full-system overviews and whole-product lifecycle accounting are crucial to understanding the true impact of operations and organisations, and to reach climate goals.

Working to timelines

Setting goals with defined timelines and the development of rules that ensure consistent accounting is also crucial to implementing effective climate change mitigation frameworks throughout the global economy. Consider the UK’s aim to be net zero by 2050, or Drax’s ambition to be net negative by 2030, as goals with set timelines.

For many technologies, the time scales over which targets are set have added relevance. There are often upfront emissions to account for and operational emissions that may change over time. Take for example an electric vehicle: the climate benefit will be determined by emissions from construction and the carbon intensity of the electricity used to power it.

A timeline of BECCS at Drax [click to view/download]

Looking at a brief snapshot at the beginning of its life, say the first couple of years, might not show any climate benefit compared to a vehicle using an internal combustion engine. Over the lifetime of the vehicle, however, meaningful emissions savings may become clear – especially if the electricity powering the vehicle continues to decarbonise over time.

This provides a challenge when setting carbon emissions targets. Targets set too far in the future potentially risk inaction in the short term, while targets set over short periods risk disincentivising technologies that have substantial long-term mitigation potential. 

Delivering net zero

Some greenhouse gas emissions will be impossible to fully abate, such as methane and nitrous oxide emissions from agriculture, while other sectors, like aviation, will be incredibly difficult to fully decarbonise. This makes carbon removal technologies all the more critical to ensuring net zero is achieved.

Technologies such as bioenergy with carbon capture and storage (BECCS) – which combines low-carbon, biomass-fuelled renewable power generation with carbon capture and storage (CCS) to permanently remove emissions from the atmosphere – are already under development.

However, it is imperative that such technologies are accounted for using robust approaches to carbon accounting, ensuring all emission and removals flows across the value chain are accurately calculated in accordance with best scientific practice. In the case of BECCS, it’s vital that not only are emissions from processing and transporting biomass considered, but also its potential impact on the land sector.

Forests from which biomass is sourced will be managed for a variety of reasons, such as mitigating natural disturbance, delivering commercial returns, and preserving ecosystems. Accurate accounting of these impacts is therefore key to ensuring such technologies deliver meaningful reductions in atmospheric CO2within timeframes guided by science.

Accounting for net zero

While carbon accounting is crucial to reaching a true level of net zero in the UK and globally, where residual emissions are balanced against removals, the practice should not be used exclusively to deliver numerical carbon goals.

“To deliver net zero, it’s vital we have robust carbon accounting systems and targets in place, ensuring we reduce fossil emissions as far as possible while also incentivising carbon removal solutions,” says Goldsworthy.

“However, many removal solutions rely on the natural world and so it is critical that ecosystems are not only valued on a carbon basis but consider other environmental factors such as biodiversity as well.”

Strong performance in Q1 2022, continuing to play an important role in energy security and global decarbonisation

27 April 2022

Investors

RNS Number : 4455J
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)

Trading and Operational Highlights

  • Strong system support performance during the first three months of 2022
  • Increase in value of contracted power prices 2022 – 2024
  • >99% of generation from renewables – sustainable biomass, hydro and pumped storage
  • 400Kt of new biomass pellet production capacity commissioned in US southeast

Financial Highlights

  • 2022 Adjusted EBITDA(1) – around the top end of current range of analyst expectations(2)
    • Expect to be significantly below 2x net debt to Adjusted EBITDA by the end of 2022
  • Final dividend of 11.3 pence to be paid subject to shareholder approval at today’s AGM
    • Total dividend for 2021 – 18.8 pence per share (2020: 17.1 pence per share)

Drax CEO, Will Gardiner [click to view/download]

Drax CEO Will Gardiner said:

“In the first quarter of 2022 we delivered a strong system support performance as our reliable, renewable electricity continued to support UK energy security and helped to keep the lights on for millions of British homes and businesses.

“We advanced our strategy to increase biomass pellet production, with another 400Kt of capacity commissioned from two new pellet plants in the US. We also progressed the engineering design work for our UK BECCS project, which will deliver negative emissions for the UK and pioneer BECCS technology at scale. BECCS is a vital carbon removals technology that the UN’s IPCC says is needed globally to achieve net zero.

“With the right government support, Drax is ready to invest £3bn this decade in delivering vital renewable energy technologies including BECCS, a carbon removal technology that is cost-effective but also the only one that generates reliable, renewable electricity while removing millions of tonnes of CO2 from the atmosphere.”

Pellet Production

In April 2022, the Group completed the commissioning of its 360Kt plant at Demopolis, Alabama and its 40Kt satellite plant in Leola, Arkansas. The Group is also currently constructing a second 40Kt satellite plant at Russellville, Arkansas, allowing greater utilisation of lower cost sawmill residues whilst leveraging on existing infrastructure in the US southeast.

Leola satellite plant under construction [February 2022]

Once at full capacity these developments, alongside incremental capacity expansions at existing sites, will increase nameplate production capacity to around 5Mt p.a. Over 2Mt p.a. of production is contracted to high-quality third-parties under long-term contracts, with the balance available to Drax to fulfil its own-use requirements.

Strong demand for forest products in construction and manufacturing markets continues to support good fibre residue availability with no material change in fibre cost. Drax notes an incremental increase in transportation costs in North America principally related to truck driver shortages and haulage costs.

The Group continues to target a Final Investment Decision (FID) on up to 1Mt of new capacity in 2022 as part of its plans to increase total pellet production capacity to 8Mt by 2030.

Generation

In the UK, the Group’s biomass, hydro and pumped storage assets have continued to play an important role in security of supply, providing stability to the UK power system at a time when higher gas prices and interconnector availability have placed the system under increased pressure.

To maximise renewable output at times of high demand, the Group is continuing to optimise biomass generation across all four biomass units at Drax Power Station, contributing to an increase in average achieved power prices.

The current power price environment increases the importance of appropriate investment to ensure good operational performance and availability, and, in March and April 2022, two biomass units underwent planned maintenance outages. The unit’s contracted positions in this period were bought back and the generation reprofiled, with no net change in output over the ROC compliance period.

Drax’s two legacy coal units were called into the Balancing Mechanism by the system operator in January for limited operations to support security of supply. These short-term measures helped to stabilise the power system during periods of system stress and did not result in any material increase in the Group’s total carbon emissions.

Drax continues to expect to formally close these two legacy coal units following the fulfilment of their Capacity Market obligations in September 2022 but remains committed to supporting security of supply in the UK. Drax has recently been asked by the UK Government to consider options for a limited extension of its coal operations and this remains under review.

Generation contracted power sales

The Group has continued to add to its forward power sales book. As at 22 April 2022, Drax had 22.2TWh of power hedged between 2022 and 2024 on its ROC and hydro generation assets at an average price of £78.1/MWh.

A further 1.8TWh equivalent of gas hedges have been contracted in 2023 and 2024 for the purpose of accessing additional liquidity for forward power sales from the ROC units. These contracts are highly correlated to forward power prices.

Due to the optimisation of biomass generation in 2022, to support increased generation at times of high demand, CfD output will be lower than historic average, with ROC unit output higher.

Contracted power sales 22 April 2022202220232024
ROC (TWh(3))11.17.73.1
- Average achieved £ per MWh74.979.084.0
Hydro (TWh)0.20.1-
- Average achieved £ per MWh107.0173.1-
Gas hedges (TWh equivalent)(4)-0.51.3
Pence per therm-108.4118.5
CfD(3/5) typical annual output c.5TWh and current strike price £126.4/MWh

Since the Group’s last update on 24 February 2022, incremental power sales from the ROC units total 1.8TWh across 2022, 2023 and 2024.

War in Ukraine

Cooling towers at Drax Power Station light up to show support for Ukraine [March 2022]

Drax previously sourced a small volume of Russian and Belarussian biomass, which it has now removed from its supply chain. The biomass that Drax uses comes from stable, sustainable markets in North America and Europe and is sourced under long-term fixed formula contracts.

The removal of Russian biomass cargoes from European supply chains has led to higher prices and lower availability in the small European spot market, adding incremental costs and limiting the potential to source additional cargoes to support incrementally higher levels of generation in 2022.

Full year expectations

Reflecting these factors, the Group now expects that full year Adjusted EBITDA for 2022 will be around the top of the range of analyst expectations, subject to continued good operational performance.

Reflecting the improved outlook for Adjusted EBITDA the Group expects net debt to Adjusted EBITDA to be significantly below 2x by the end of 2022.

Bioenergy Carbon Capture and Storage (BECCS)

During 2022 Drax is investing incremental capital expenditure and development expenditure into BECCS, including continuing a Front-End Engineering Design study at Drax Power Station.

Drax continues to expect to take a FID in 2024 and expects the UK Government to set out the process for selection and support for individual BECCS projects, such as BECCS at Drax Power Station, during 2022.

The development of BECCS in the UK is supported by the Group’s plans to invest in the expansion of its biomass pellet production to deliver security of supply for the biomass volumes required for BECCS, which are expected to be underpinned by long-term contracts reflecting the market price of biomass.

The Group is also continuing to develop options to deliver 4Mt of negative CO2 emissions each year from new-build BECCS outside of the UK by 2030 and is currently developing models for North American and European markets.

Other

The Group is continuing to assess operational and strategic solutions to support the development of its SME(6) supply business.

In March 2022, Drax signed a development agreement with EPC contractor Mytilineos for the development of three Open Cycle Gas Turbine (OCGT) developments.

At the full year results in February 2022 Drax noted it would invest up to £100 million in 2022 to fulfil obligations under the Capacity Market agreements, but was continuing to evaluate options for its OCGT developments, including their sale. Drax expects that any capital invested in 2022 will be recovered in the event of a sale.

Enquiries:

Drax Investor Relations: Mark Strafford
+44 (0) 1757 612 491

Media:

Drax External Communications: Ali Lewis
+44 (0) 7712 670 888
Website: www.drax.com

END

Why and how is carbon dioxide transported?

11 April 2022

Carbon capture

What is carbon transportation?

Carbon transportation is the movement of carbon from one place to another. In nature, carbon moves through the carbon cycle. In industries like energy, however, carbon transportation refers to the physical transfer of carbon dioxide (CO2) emissions from the point of capture to the point of usage or storage.

Why does carbon need to be transported?

Anthropogenic (man-made) CO2 released in processes like power generation leads to the direct increase of CO2 in the atmosphere and contributes to global warming.

However, these emissions can be captured as part of carbon capture and storage (CCS). The CO2 is then transported for safe and permanent storage in geological formations deep underground.

Capturing and storing CO2 prevents it from entering the atmosphere and contributing to global warming. Processes that can deliver negative emissions – such as bioenergy with carbon capture and storage (BECCS) and direct air capture and storage (DACS) – aim to permanently remove CO2 from the atmosphere through CCS.

In CCS, carbon must be transported from the site where it’s captured to a site where it can be permanently stored. This means it needs to travel from a power station or factory to a geological formation like a saline aquifer or depleted oil and gas reservoirs.

As of September 2021, there were 27 operational CCS facilities around the world, with the combined capacity to capture around 40 million tonnes per annum (Mtpa) of CO2. It’s estimated that the UK alone has 70 billion tonnes of potential CO2 storage space in sandstone rock formations under the North Sea.

How is carbon transported?

CO2 can be transported via trucks or ships, but the most common and efficient method is by pipeline. Moving gases of any kind through pipelines is based on pressure. Gases travel from areas of high pressure to areas of low pressure. Compressing gas to a high pressure allows it to flow to other locations.

Gas pipelines are common all around the world, including those transporting CO2. In the US there are, for instance, more than 50 CO2 pipelines – covering around 6,500 km and transporting approximately 68 million tonnes of CO2 a year.

Gas takes up less volume when it’s compressed, and even less when it is liquefied, solidified, or hydrated. Therefore, before being transported, captured CO2 is often compressed and liquefied until it becomes a supercritical fluid.

In a supercritical state, CO2 has the density of a liquid but the viscosity (thickness) of a gas and is, therefore, easier to transport through pipelines. It’s also 50-80% less dense than water, with a viscosity that is 100 times lower than liquid.

This means it can be loaded onto ships in greater quantities and that there is less friction when it’s moving through pipes and, subsequently, into geological storage sites.

How safe is it to transport carbon?

It’s no riskier to transport CO2 via pipeline or ship than it is to transport oil and natural gas, and existing oil and natural gas pipelines can be repurposed to transport CO2.

To enable the safe use of CO2 pipelines, CCS projects must ensure captured CO2 complies with strict purity and temperature specifications, as well as making sure CO2 is dry and free from impurities that could impact pipelines’ operations.

Whilst there are a growing number of CCS transport systems around the world, CCS is still is a relatively new field but research is underway to identify best practises, materials and technologies to optimise the process. This includes research around potential risks and techniques for leak mitigation and remediation.

In the UK, the Health and Safety Executive regulates health, safety, and integrity issues for all natural gas pipelines, which are covered by legislation. The legislation ensures the safety of pipelines, pressure systems and offshore installations and can serve as a strong foundation for CO2 transport regulation.

Fast facts

Go deeper 

Cruachan Power Station: Protecting biodiversity while generating power

1 April 2022

Sustainable business

Key points:

  • The Scottish Highlands are home to a wide variety of landscapes, with a wealth of biodiversity that must be preserved.
  • Cruachan pumped storage hydro station sits within Ben Cruachan and has operated for nearly 60-years without damaging wildlife.
  • Regular surveys and reporting allow Drax to understand the health of different fauna and species over time.
  • It’s promising that even species of bird and insects that are declining in other parts of the UK are regularly spotted around Cruachan.
  • The expansion of the power station has required and will continue to need careful assessment of the area’s biodiversity to minimise any impact the project could cause.

The Scottish Highlands are home to some of the UK’s most stunning natural wonders. From dramatic plunging lochs to the craggy, ice capped Munros, the varied landscape holds some of the most biodiverse areas in the UK. The region’s fauna ranges from red deer to golden eagles, while its flora includes the ancient oak and moss-covered forests that make up the ‘temperate rainforest’ of the Atlantic coast.

Preserving these landscapes and the life that thrives in them is crucial to both the environment and economy of the region. It’s the job of Roddy Davies, Health, Safety, and Environmental Advisor at Drax’s Cruachan Power Station to ensure operations at the site do not damage the natural environment.

“This is a very biodiverse, rich environment. There are a lot of different species, a large variety of natural habitats and plant life,” says Davies. “It’s good that we can say we’ve operated here for nearly 60 years, and all of that is still there. It’s testament that we don’t have a demonstrable negative effect on the wildlife that lives around us.”

Source: Blue Leaf Nature

Energy storage inside a mountain

The pumped storage hydro station sits a kilometre inside Ben Cruachan, a Munro peak in the Western Highland region of Argyll and Bute. It’s not an area you would normally associate with power generation, but it’s perfect for pumped storage hydro. The site has two bodies of water at differing elevations, Loch Awe at the bottom and a reservoir at the top allowing Cruachan to generate power when it’s needed, as well as absorb electricity when there is an excess on the grid by pumping water back up the mountain. Storing it until power is needed and helping to keep the grid balanced.

The subterranean nature of the power station means the massive machinery, including the four reversible turbines, and the heat and noise they generate, is hidden underground.

Features on the surface are limited to a few buildings by the entrance tunnel at the banks of Loch Awe, and the dam which contains the upper reservoir on the slopes of Ben Cruachan, as well as several pylons and cables transporting electricity. Even the 316-metre buttress dam takes the landscape into account.

“When Cruachan was built in the ’50s and ’60s, the visual impact of it was very much in the minds of the people who built it and the authorities who approved it. The dam is almost impossible to see from a public place,” explains Davies. “Our presence on the surface is very limited. All the busy goings-on are underground. There’s lots of noise underground, but it doesn’t travel outside.”

Ensuring that the area surrounding Drax’s operation continues to function without damaging the surrounding environment is an ongoing process. Davies deploys annual biodiversity surveys and reporting that gives Drax over a decade of information and analysis to help identify trends.

The wildlife of Ben Cruachan

The Cruachan Power Station Biodiversity Survey for 2021 is the 11th completed by Blue Leaf Nature, a biodiversity service provider. The comprehensive report highlights the incredible diversity of fauna surrounding Cruachan, some of which are declining in other parts of the country.

While the majestic red stags found in other parts of the Highlands are extremely uncommon around Cruachan, 2021 was a particularly exciting year for other types of large mammals. Pine martens – a cat-sized relative of the weasel – are relatively common, appearing alongside red squirrels, red foxes, and otters. Badgers were also added to the site’s list of species for the first time.

Source: Blue Leaf Nature

Mammals, however, are exceeded by the range of birds found around Cruachan, with 53 different species spotted in 2021. Of these, 17 species appear on the Birds of Conservation Concern Five’s red list, the highest threat status to the UK’s bird population, including the Ring Ouzel, Yellowhammer and Tree Pipet. A further 27 appear on the Regional International Union for the Conservation of Nature (IUCN) Red List of Threatened Species. Additionally, six of the spotted species are considered endangered (including Herring Gull and Northern Wheatear) and 11 vulnerable by the IUCN.

Sightings of these threatened species around Cruachan come despite particularly unfavourable weather in 2021. One of the driest Aprils on record followed by an exceptionally wet May disrupted the bird breeding season. This in turn resulted in a difficult nesting season, exacerbated by food shortages due to the weather’s effect on insect life.

In the report’s survey of invertebrates, 150 different species were recorded in 2021, down from 170 in 2018. However, it’s promising that among Cruachan’s creepy-crawlies are many that are in decline elsewhere in the UK, with the numbers of some important insect types are increasing. Dragonfly and damselfly species, for example, increased from five in the previous survey to nine in 2021.

Moths and butterflies are particularly important to monitor, as Davies explains: “they’re a very strong indicator species for the health and quality of an ecosystem. They’re also very sensitive to climatic changes and  react quickly to temperature change.”

Source: Blue Leaf Nature

In 2021, 78 moth species were recorded around Cruachan, including one of Butterfly Conservation’s noted priority species (Yellow-ringed carpet), as well as six species that feature on IUCN’s red or amber lists. There were 11 butterfly species recorded in 2021, including four priority species, as well as two newly spotted species: the Small Copper and the Chequered Skipper.

That species in decline around the country are increasingly thriving at Cruachan is further testament to the power station’s lack of disruption to the environment. And as the UK’s electricity system continues to evolve, and Cruachan power station with it, closely observing the surrounding environment and its inhabitants will become even more important.

Expanding Cruachan while preserving nature

While Cruachan first started generating and storing power in the 1960s, its capabilities are becoming ever more critical as the national grid decarbonises and power generation becomes increasingly decentralised. This is why Drax is undertaking an ambitious project to expand Cruachan.

Cruachan 2 would add a further 600 MW of generation capacity to the plant for a total of 1.04 GW of power. By providing stability services to the grid, the expansion could enable an additional 300-gigawatt hours of renewable power to come online.

Source: Blue Leaf Nature

The project is epic in scale. New underground tunnels and subterranean caverns will house the reversible pump-turbines and will be carved out of the mountain, vastly increasing the size of the power station. But as with any activity in such a landscape, careful planning is essential. Detailed surveys and assessments of the area are a key requirement for planning approval.

“We need to acknowledge what’s here and show that we understand what surveys have found,” says Davies. “Then we have to present our proposals for how we will protect them and mitigate any potential disturbance.”

An advantage of pumped storage hydro is that much of the intensive excavating and construction work will take place underground, with little disturbance on the surface. Cruachan 2 has the added benefit of utilising Cruachan’s existing infrastructure. For example, it would not require flooding a valley to create a new upper reservoir.

Ultimately, Cruachan’s half century-plus of operation has not damaged or degraded the biodiversity of the Western Highlands landscape. And Davies is keen to ensure that legacy is preserved: “As a company, it’s not just something we have to do; we have a moral responsibility to be a responsible operator and look after what’s around us.”

View the Cruachan Power Station Biodiversity Survey 2022 here and find out more about Green Tourism at Cruachan here. 

What is the carbon cycle?

25 March 2022

Carbon capture

What is the carbon cycle?

All living things contain carbon and the carbon cycle is the process through which the element continuously moves from one place in nature to another. Most carbon is stored in rock and sediment, but it’s also found in soil, oceans, and the atmosphere, and is produced by all living organisms – including plants, animals, and humans.

Carbon atoms move between the atmosphere and various storage locations, also known as reservoirs, on Earth. They do this through mechanisms such as photosynthesis, the decomposition and respiration of living organisms, and the eruption of volcanoes.

As our planet is a closed system, the overall amount of carbon doesn’t change. However, the level of carbon stored in a particular reservoir, including the atmosphere, can and does change, as does the speed at which carbon moves from one reservoir to another.

What is the role of photosynthesis in the carbon cycle?

Carbon exists in many different forms, including the colourless and odourless gas that is carbon dioxide (CO2). During photosynthesis, plants absorb light energy from the sun, water through their roots, and CO2 from the air – converting them into oxygen and glucose.

The oxygen is then released back into the air, while the carbon is stored in glucose, and used for energy by the plant to feed its stem, branches, leaves, and roots. Plants also release CO2 into the atmosphere through respiration.

Animals – including humans – who consume plants similarly digest the glucose for energy purposes. The cells in the human body then break down the glucose, with CO2 emitted as a waste product as we exhale.

CO2 is also produced when plants and animals die and are broken down by organisms such as fungi and bacteria during decomposition.

What is the fast carbon cycle?

The natural process of plants and animals releasing CO2 into the atmosphere through respiration and decomposition and plants absorbing it via photosynthesis is known as the biogenic carbon cycle. Biogenic refers to something that is produced by or originates from a living organism. This cycle also incorporates CO2 absorbed and released by the world’s oceans.

The biogenic carbon cycle is also called the “fast” carbon cycle, as the carbon that circulates through it does so comparatively quickly. There are nevertheless substantial variations within this faster cycle. Reservoir turnover times – a measure of how long the carbon remains in one location – range from years for the atmosphere to decades through to millennia for major carbon sinks on land and in the ocean.

What is the slow carbon cycle?

In some circumstances, plant and animal remains can become fossilised. This process, which takes millions of years, eventually leads to the formation of fossil fuels. Coal comes from the remains of plants that have been transformed into sedimentary rock. And we get crude oil and natural gas from plankton that once fell to the ocean floor and was, over time, buried by sediment.

The rocks and sedimentary layers where coal, crude oil, and natural gas are found form part of what is known as the geological or slow carbon cycle. From this cycle, carbon is returned to the atmosphere through, for example, volcanic eruptions and the weathering of rocks. In the slow carbon cycle, reservoir turnover times exceed 10,000 years and can stretch to millions of years.

How do humans impact the carbon cycle?

Left to its own devices, Earth can keep CO2 levels balanced, with similar amounts of CO2 released into and absorbed from the air. Carbon stored in rocks and sediment would slowly be emitted over a long period of time. However, human activity has upset this natural equilibrium.

Burning fossil fuel releases carbon that’s been sequestered in geological formations for millions of years, transferring it from the slow to the fast (biogenic) carbon cycle. This influx of fossil carbon leads to excessive levels of atmospheric CO2, that the biogenic carbon cycle can’t cope with.

As a greenhouse gas that traps heat from the sun between the Earth and its atmosphere, CO2 is essential to human existence. Without CO2 and other greenhouse gases, the planet could become too cold to sustain life.

However, the drastic increase in atmospheric CO2 due to human activity means that too much heat is now retained between Earth and the atmosphere. This has led to a continued rise in the average global temperature, a development that is part of climate change.

Where does biomass fit into the carbon cycle?

One way to help reduce fossil carbon is to replace fossil fuels with renewable energy, including sustainably sourced biomass. Feedstock for biomass energy includes plant material, wood, and forest residue – organic matter that absorbs CO2 as part of the biogenic carbon cycle. When the biomass is combusted in energy or electricity generation, the biogenic carbon stored in the organic matter is released back into the atmosphere as CO2.

This is distinctly different from the fossil carbon released by oil, gas, and coal. The addition of carbon capture and storage to bioenergy – creating BECCS – means the biogenic carbon absorbed by the organic matter is captured and sequestered, permanently removing it from the atmosphere. By capturing CO2 and transporting it to geological formations – such as porous rocks – for permanent storage, BECCS moves CO2 from the fast to the slow carbon cycle.

This is the opposite of burning fossil fuels, which takes carbon out of geological formations (the slow carbon cycle) and emits it into the atmosphere (the fast carbon cycle). Because BECCS removes more carbon than it emits, it delivers negative emissions.

Fast facts

  • According to a 2019 study, human activity including the burning of fossil fuels releases between 40 and 100 times more carbon every year than all volcanic eruptions around the world.
  • In March 2021, the Mauna Loa Observatory in Hawaii reported that average CO2 in the atmosphere for that month was 14 parts per million. This was 50% higher than at the time of the Industrial Revolution (1750-1800).
  • There is an estimated 85 billion gigatonne (Gt) of carbon stored below the surface of the Earth. In comparison, just 43,500 Gt is stored on land, in oceans, and in the atmosphere.
  • Forests around the world are vital carbon sinks, absorbing around 7.6 million tonnes of CO2 every year.

Go deeper

How biomass can enable a hydrogen economy

10 March 2022

Carbon capture

Key points:

  • Hydrogen as a fuel offers a carbon-free alternative for hard-to-abate sectors such as heavy road transport, domestic heating, and industries like steel and cement.
  • There are several methods of producing hydrogen, the most common being steam methane reforming, which can be a carbon-intensive process.
  • Biomass gasification with CCS is a form of bioenergy with carbon capture and storage (BECCS) that can produce hydrogen and negative emissions – removing CO2 permanently from the atmosphere.
  • The development of both BECCS and hydrogen technologies will determine how intrinsically connected the two are in a net zero future.

Reaching net zero means more than just transitioning to renewable and low carbon electricity generation. The whole UK economy must transform where its energy comes from to low-emissions sources. This includes ‘hard-to-abate’ industries like steel, cement, and heavy goods vehicles (HGVs), as well as areas such as domestic heating.

One solution is hydrogen. The ultra-light element can be used as a fuel that when combusted in air produces only heat, water vapour, and nitrous oxide. As hydrogen is a carbon-free fuel, a so-called ‘hydrogen economy’ has the potential to decarbonise hard-to-abate sectors.

While hydrogen is a zero-carbon fuel its production methods can be carbon-intensive. For a hydrogen economy to operate within a net zero UK carbon-neutral means of producing it are needed at scale. And biomass, energy from organic material – with or without carbon capture and storage (in the case of BECCS)– could have a key role to play.

In January 2022, the UK government launched a £5 million Hydrogen BECCS Innovation Programme. It aims to develop technologies that can both produce hydrogen for hard-to-decarbonise sectors and remove CO2 from the atmosphere. The initiative highlights the connected role that biomass and hydrogen can have in supporting a net zero UK.

Producing hydrogen at scale

Hydrogen is the lightest and most abundant element in the universe. However, it rarely exists on its own. It’s more commonly found alongside oxygen in the familiar form of H2O. Because of its tendency to form tight bonds with other elements, pure streams of hydrogen must be manufactured rather than extracted from a well, like oil or natural gas.

As much as 70 million tonnes of hydrogen is produced each year around the world, mainly to make ammonia fertiliser and chemicals such as methanol, or to remove impurities during oil refining. Of that hydrogen, 96% is made from fossil fuels, primarily natural gas, through a process called steam methane reforming, of which hydrogen and CO2 are products. Without the use of carbon capture, utilisation, and storage (CCUS) technologies the CO2 is released into the atmosphere, where it acts as a greenhouse gas and contributes to climate change.

Another method of producing hydrogen is electrolysis. This process uses an electric current to break water down into hydrogen and oxygen molecules. Like charging an electric vehicle, this method is only low carbon if the electricity sources powering it are as well.

For electrolysis to support hydrogen production at scale depends on a net zero electricity grid built around renewable electricity sources such as wind, solar, hydro, and biomass.

However, bioenergy with carbon capture and storage (BECCS) offers another means of producing carbon-free renewable hydrogen, while also removing emissions from the atmosphere and storing it – permanently.

Producing hydrogen and negative emissions with biomass 

Biomass gasification is the process of subjecting biomass (or any organic matter) to high temperatures but with a limited amount of oxygen added that prevents complete combustion from occurring.

The process breaks the biomass down into a gaseous mixture known as syngas, which can be used as an alternative to methane-based natural gas in heating and electricity generation or used to make fuels. Through a water-gas shift reaction, the syngas can be converted into pure streams of CO2 and hydrogen.

Ordinarily, the hydrogen could be utilised while the CO2 is released. In a BECCS process, however, the CO2 is captured and stored safely and permanently. The result is negative emissions.

Here’s how it works: BECCS starts with biomass from sustainably managed forests. Wood that is not suitable for uses like furniture or construction – or wood chips and residues from these industries – is often considered waste. In some cases, it’s simply burnt to dispose of it. However, this low-grade wood can be used for energy generation as biomass.

When biomass is used in a process like gasification, the CO2 that was absorbed by trees as they grew and subsequently stored in the wood is released. However, in a BECCS process, the CO2 is captured and transported to locations where it can be stored permanently.

The overall process removes CO2 from the atmosphere while producing hydrogen. Negative emissions technologies like BECCS are considered essential for the UK and the world to reach net zero and tackle climate change.

Building a collaborative net zero economy  

How big a role hydrogen will play in the future is still uncertain. The Climate Change Committee’s (CCC) 2018 report ‘Hydrogen in a low carbon economy’ outlines four scenarios. These range from hydrogen production in 2050 being able to provide less than 100 terawatt hours (TWh) of energy a year to more than 700 TWh.

Similarly, how important biomass is to the production of hydrogen varies across different scenarios. The CCC’s report puts the amount of hydrogen produced in 2050 via BECCS between 50 TWh in some scenarios to almost 300 TWh in others. This range depends on factors such as the technology readiness level of biomass gasification. If it can be proven – technical work Drax is currently undertaking – and at scale, then BECCS can deliver on the high-end forecast of hydrogen production.

The volumes will also depend on the UK’s commitment to BECCS and sustainable biomass. The CCC’s ‘Biomass in a low carbon economy’ report offers a ‘UK BECCS hub’ scenario in which the UK accesses a greater proportion of the global biomass resource than countries with less developed carbon capture and storage systems, as part of a wider international effort to sequester and store CO2. The scenario assumes that the UK builds on its current status and continues to be a global leader in BECCS supply chains, infrastructure, and geological storage capacity. If this can be achieved, biomass and BECCS could be an intrinsic part of a hydrogen economy.

There are still developments being made in hydrogen and BECCS, which will determine how connected each is to the other and to a net zero UK. This includes the feasibility of converting HGVs and other gas systems to hydrogen, as well as the efficiency of carbon capture, transport and storage systems. The cost of producing hydrogen and carrying out BECCS are also yet to be determined.

The right government policies and incentives that encourage investment and protect jobs are needed to progress the dual development of BECCS and hydrogen. Success in both fields can unlock a collaborative net zero economy that delivers a carbon-free fuel source in hydrogen and negative emissions through BECCS.

Storage solutions: 3 ways energy storage can get the grid to net zero

28 February 2022

Electrification

Key points:

  • Energy storage plays a crucial role in the UK electricity system by not only providing reserve power for when demand is high but also absorbing excess power when demand is low.
  • The UK’s electricity system’s growing dependency on intermittent renewables means the amount of energy storage needed will increase to as much as 30 GW by 2050.
  • There are three different durations of energy storage needed to help balance the grid: short-term, day-to-day and long term.
  • It will take a range of technologies including batteries, pumped storage hydro and new approaches to meet the storage demands of a net zero grid.

When you turn on a lightbulb – in 10, 20, or 30 years – the same thing will happen. Electricity will light up the room. But where that electricity comes from will be different. As the country moves toward net zero emissions, low carbon and renewable power sources will become the norm. However, it’s not as simple as swapping in renewables for the fossil fuels the grid was built around.

Weather dependant sources, like wind and solar, are intermittent – meaning other sources are needed at times when there’s little wind or no sunshine to meet the country’s electricity demand. Equally as challenging to manage, however, is what to do when there’s an excess of power being generated at times of low demand.

Energy storage offers a low carbon means of delivering power at times of low supply, as well as absorbing any excess of generated power when demand is low, helping to balance and stabilise the grid. As the electricity system transforms through a range of low-carbon and renewable technologies, the amount of energy storage on the UK grid will need to expand from 3 GW of today to over 30 GW in the coming decades.

The storage solution

Even as the UK’s electricity system transforms, from fossil fuels to renewables, the way the grid operates remains primarily the same. Central to that is the principle that the supply of electricity being generated must always match the demand on a second-by-second basis.

Too little or too much power on the system can cause power outages and damage equipment. National Grid needs to be able to call on reserve power sources to meet demand when supply is low or pay to curtail renewable sources’ output when demand drops. During the summer of 2020, for example, lower demand due to Covid-19 coupled with high renewable output resulted in balancing costs 40% above expectations.

“There is a lot of offshore wind coming online in Scotland, as much as 11 GW by 2030 and a further 25 GW planned,” explains Steve Marshall, a Development Manager at Drax.

Offshore wind farm along the coast of Scotland

“It’s great because it increases the amount of renewable power on the system, but the transmission lines between Scotland and England can become saturated as much as 30-40% of the time because there is too much power.”

Electricity storage can provide a source of reserve power, as well as absorb excess electricity. These capabilities are crucial for balancing the grid and ensuring that frequency remains within a stable operating range of 50 Hertz, as well as providing other ancillary services.

Whether it’s absorbing power or delivering electricity needed to keep the grid stable, in energy storage, timing is everything.

There are three main time periods electricity storage needs to operate over:

  1. Fast-acting, short term electricity

Because electricity supply must always match demand, sudden changes mean the grid needs to respond immediately to ensure frequency and voltage remain stable, and electricity safe to use.

Batteries are considered the fastest technology for responding to a sudden spike in demand or an abrupt loss of supply.

Battery technology has evolved rapidly in recent decades as innovations like lithium-ion batteries, such as those used in electric cars, and emerging solid-state batteries become more affordable and more commonplace. This makes it more feasible to deploy large-scale installations that can absorb and store excess power from the grid.

“Batteries are good for near-instantaneous responses. It can be a matter of milliseconds for a battery to deploy power,” says Marshall. “If there’s a sudden problem with frequency or voltage, batteries can respond – it’s something that’s quite unique to them.”

The speed at which batteries can deploy and absorb electricity makes them useful grid assets. However, even very large battery setups can only discharge power for around two hours. If, for example, the wind dropped off for a long period the grid needs a longer-duration supply of stored power.

  1. Powering day-to-day changes in supply, demand, and the grid

When it comes to managing the daily variations of supply and demand the grid needs to be able to call on reserves of power for when there are unexpected changes in the weather or electricity demand from users. Pumped storage hydro power offers a low carbon way to provide huge amounts of electricity, quickly and for periods that can last as long as eight or even 24 hours.

The technology works by moving water between two reservoirs of water at different elevations. When there is demand for electricity water is released from the upper reservoir, which rushes down a series of pipes, spinning water turbines, generating electricity. However, when there is an excess of power on the electricity system the same turbines can reverse and absorb electricity to pump water from the lower to the upper reservoir, storing it there as a massive ‘water battery’.

Pumped storage hydro is a long-established technology, having been developed since the 1890s in Italy and Switzerland. In the UK today there are four pumped storage hydro power stations in Scotland and Wales, with a total capacity of 2.8 GW.

Among those is the Drax-owned Cruachan Power Station in the Scottish Highlands. The plant is made up of four generating/pumping turbines located inside Ben Cruachan between Loch Awe and an upper reservoir holding 10 million cubic metres of water.

Turbine Hall at Cruachan Power Station

Pumped hydro storage facilities can rapidly begin generating large volumes of power in as little as 30 seconds or less. The ability to switch their turbines between different modes – pump, generate, and spin mode to provide inertia to the gird without producing power – make pumped storage hydro plants versatile assets for the gird.

“How Cruachan operates depends on weather,” says Marshall. “We make as many 1000 mode changes a month, that’s how frequently Cruachan is called on by National Grid.”

As the electricity system transforms there will be a greater need for flexible energy storage like pumped storage hydro, this is why Drax is kickstarting plans to expand Cruachan Power Station, however, the specific conditions needed for such facilities can make new projects difficult and expensive.

Cruachan 2, to the east of the original power station, will add up to 600 MW in generating capacity, more than doubling the site’s total capacity to more than 1GW. By increasing the number of turbines operating at the facility it increases the range of services that the grid can call upon from the site.

  1. Long-term electricity solutions

However, storage technologies as they exist today cannot alone offer all the solutions the UK will need to achieve its net zero targets. While technologies like pumped storage can generate for the better part of a day, longer periods of unfavourable conditions for renewables will need new approaches.

In March 2021, for example, the UK experienced its longest cold and calm spell in more than a decade, with wind farms operating at just 11% of their capacity for 11 days straight, according to Electric Insights.

The shortfall in the country’s primary source of renewable power was made up for by gas power stations. But in a net zero future, such responses will only be feasible if they’re part of carbon capture and storage systems or replaced by other carbon neutral or energy storage solutions.

Generating enough power to supply an electrified future, as well as being able to take pressure off the grid and provide balancing services will require a range of technologies working in tandem over extended periods.

Interconnectors with neighbouring countries, for example, can work alongside storage solutions to shed excess power to where there is greater demand. Similarly, rather than curtailing wind or solar power, extra electricity could be used for electrolysis to produce hydrogen. Other functions may include demand side response where heavy power users are incentivised to reduce their electricity usage during peak periods helping to reduce demand.

To achieve stable, reliable, net zero electricity systems the UK needs to act now to not only replace fossil fuels with renewables but put the essential energy storage and balancing solutions in place, that means electricity is there when you turn on a lightbulb.