Environment - Drax

Environment

Our responsibility for the environment as a major power supplier goes beyond reducing our carbon emissions and we manage our wider environmental impact, including other emissions to air, water use, waste, biodiversity and sourcing responsibly.

Carbon emissions

Summary performance - carbon emissions

 Unit of measure20182017201620152014
Drax Group Scope 1 and 2 Carbon Emissions
Scope 1
Fossil fuel combustionkt4,107*6,1696,02113,10116,476
Operationskt<100*<100<100<100119
Total Scope 1kt4,107*6,1696,02113,10116,595
Scope 2
Purchased electricitykt248*127151216249
Total Scope 1 and 2kt4,355*6,2966,17213,31716,844
Proportion of emissions within the UK%97.3
Drax Group Biologically Sequestered Carbon (Biomass Combustion) Emissions
Biologically sequestered carbon (biomass combustion)kt13,01912,196▲11,836▲10,372▲7,150
Drax Group Total Emissions per GWh of Electricity Generated by Fossil Fuel Combustion
Gross generationTWh19.421.220.828.128.5
Emissions per GWh of electricity generationt/GWh225297297474591
Drax Group Total Energy Consumption
Total Group energy consumptionTJ180971
Total Group energy consumption within the UKTJ173072

* Limited external assurance using the assurance standard ISAE 3000 for 2018 data as indicated. For assurance statement and basis of reporting see www.drax.com/sustainability/assurance-statement/

▲ 2017, 2016 and 2015 data has been restated to reflect an update to the emissions factor applied to combustion data for Drax Biomass sites

Notes
We calculate and report our carbon emissions in accordance with the Companies Act 2006 and the European Union Emissions Trading System (EU ETS). We are required to disclose emissions from biologically sequestered carbon, which includes emissions released through the combustion of biomass to generate electricity. The biogenic CO2 emissions resulting from power generation are counted as zero in official reporting to both UK authorities and under the EU ETS as the use of sustainable biomass is considered to be CO2 neutral at the point of combustion. This methodology originates from the United Nations Framework Convention on Climate Change. The majority of our emissions result from the process of using solid fuel. This can make it difficult to identify other smaller trends that are still significant. To counteract this dominance and to ensure we retain a balance between highlighting significant developments and providing meaningful data, we have adopted a materiality threshold of 100,000 tonnes of CO2e.

Drax Group’s total Scope 1 carbon emissions decreased by 33.4% between 2017 and 2018. This reflects a reduced use of coal and the conversion of a fourth generating unit at Drax Power Station to use sustainable biomass as fuel.

Our Scope 2 carbon emissions increased, due to Pellet Production moving into our reporting scope. Pellet Production saw a record output as our third pellet plant, LaSalle in Louisiana, achieved full production in 2018.

We have reported our global and UK Total Energy Consumption for 2018, in advance of the Streamlined Energy and Carbon Reporting (SECR) requirements effective from April 2019.

Our position on climate change

Energy generation is a key contributor to the UK’s carbon emissions. We have a significant role to play in the transition to a low-carbon future and in helping the UK meet its legally binding climate change targets. We are determined to continue to reduce our carbon emissions while providing the power the economy requires.

Risks and opportunities

Climate change poses both risks and opportunities for Drax Group. To reduce the risks to our business, we are committed to reducing our operational carbon emissions and emissions from our supply chain by transitioning away from coal and using sustainable biomass. Our portfolio of flexible, low-carbon and renewable assets will ensure that Drax can help support a power system with increasing intermittent renewable capacity by providing flexible generation and system support.

We recognise that investors and other stakeholders increasingly require clear information about the climate change risks to our business. This will increase with initiatives such as the Financial Stability Board’s (FSB) Task Force on Climate-Related Financial Disclosures (TCFD) recommending greater disclosure of the specific financial risks of climate change. We are fully committed to transparent disclosure of climate-related information and provided a Group response to the CDP Climate Change and Forests questionnaires in 2018.

Innovating to decarbonise our business

Drax is playing its part to enable a zero carbon future. We completed the conversion of our fourth biomass generating unit, which became operational in August 2018. We continue our work to replace our two remaining coal generating units with Combined Cycle Gas Turbines (CCGTs).

In May 2018 we started Europe’s first Bioenergy Carbon Capture and Storage (BECCS) pilot project at Drax Power Station. The pilot will capture up to a tonne of CO2 a day from the gases produced when renewable power is generated using biomass.

“At Drax we want to enable a zero carbon, lower cost energy future – to do that we have to test the technologies that could allow us, as well as the UK and the world, to deliver negative emissions and start to reduce the amount of carbon dioxide in the atmosphere.”

Will Gardiner

Group CEO, Drax Group

Advocating for carbon pricing

In 2018 we continued our engagement with Government and stakeholders to advocate for a robust carbon price. We signed a joint European carbon pricing declaration with global companies calling for more action to support a strong and predictable carbon price.

Zero carbon energy supply

Our B2B Energy Supply businesses are committed to sourcing the renewable power that our customers want. We provided over 350,000 UK business premises with 100% renewable electricity, making our B2B Energy Supply business the largest renewable electricity supplier to UK business for the Ofgem compliance period ending in 2018.

Additional information on our B2B Energy Supply fuel mix disclosures is available at:

Environmental impact

We are committed to managing, monitoring and reducing the environmental impact of our operations and the Group environment policy outlines our approach.

Our Environmental Management System (EMS) covering Drax Power Station is certified to ISO 14001. There were no major or minor breaches to our environmental permits at Drax Power Station in 2018.

Other emissions to air

Summary performance - other emissions to air

 Unit of measure20182017201620152014
Drax Power Station Emissions to Air
Sulphur dioxidekt5.58.98.318.523.8
Nitrogen oxideskt11.814.914.731.435.5
Particulateskt0.70.810.90.9

In addition to carbon, we manage our other emissions to air, including sulphur dioxide (SO2), nitrogen oxides (NOx) and particulates. Drax Power Station complies with all UK and EU emissions limits and we report our data to the Environment Agency (EA) on a quarterly basis. The EA scrutinises our data and makes it publicly available.

Emissions of sulphur dioxide and nitrogen oxides have reduced significantly over the last ten years, with the reductions continuing in 2018. This can be partly attributed to our reduced coal generation, as we completed the conversion of a fourth generating unit to burn biomass.

Our coal units all use flue gas desulphurisation equipment, which reduces emissions of SO2 to within current and anticipated regulatory limits before the flue gas is released via the chimney into the atmosphere.

In 2008 we completed a programme to retrofit all units with primary low NOx technology – Boosted Over Fire Air systems – to ensure compliance with the NOx limits under the Large Combustion Plant Directive (LCPD) which were strengthened in 2008.

In order to meet the requirements of the European Union’s Industrial Emissions Directive which superseded the LCPD from 2016, we are investing tens of millions of pounds to implement a number of further NOx abatement measures. We are working to reduce the NOx emissions at Drax Power Station through the installation of selective non-catalytic reduction technology. We measure gas composition and temperature by means of an array of lasers fitted to the sidewalls of our furnaces. The lasers scan for furnace exit gases and the information gathered is then added to other emissions data to provide real-time feedback, enabling us to optimise combustion in order to optimise emissions of NOx and carbon monoxide.

We are focused on meeting the requirements of the Best Available Techniques Reference document (BREF). BREF will further reduce air emission limits when it enters into force, which will be no later than mid-2021.

Drax Power Station particulate emissions fell in 2018. Our emissions are closely monitored by the Environment Agency and continue to be well within our environmental permit and statutory limits.

At Drax Biomass, independent testing conducted on our behalf found emissions to air at Morehouse pellet plant exceeded permitted levels. We referred ourselves to the relevant authorities and we are working to ensure compliance.

Water

Summary performance - water

 Unit of measure20182017201620152014
Total water returnedmt42.1*40.138.435.234.1
Drax Power Station Water Use
Total water withdrawalmt61.7*5955.362.564.6

* Limited external assurance using the assurance standard ISAE 3000 for 2018 data as indicated. For assurance statement and basis of reporting see www.drax.com/sustainability/assurance-statement/

Notes. Total water withdrawal is the sum of all water drawn into the boundaries of the organisation from all sources for any use over the course of the reporting period. This includes the River Ouse, borehole and mains water.

Drax Power Station uses water from the River Ouse and much smaller volumes of borehole and mains water. The water we abstract is principally used for cooling, with smaller quantities used in the steam system and ancillary processes, such as our selective non-catalytic reduction equipment that reduces our nitrogen oxide emissions. Around half of the water abstracted for cooling is returned to the River Ouse. Procedures are in place on site to manage and monitor drainage and water systems and ensure that all discharge consent limits are met.

Each of our generating units has a specific water requirement for cooling, which is a key factor in operating the unit efficiently. We strive to find opportunities for process optimisation, such as turning off the cooling water pumps when possible to aid further resource and efficiency gains. We monitor a number of flow meters around the station for excessive demand, which allows us to investigate and address significant leakages.

As our business has moved towards increased biomass generation and the electricity market has evolved, our coal-generating units are not required to run at as high an output as they have historically. These units are increasingly required to be more flexible such that they need to be turned off and on more often than in the past. This has the effect of increasing the volume of water used per unit of electricity generated from these units (the rate of use), although the total volume of water used will be lower as the coal units do not operate for as long. The increased number of starts also increases the amount of boiler water required compared to units running at baseload (the permanent minimum power load that the national grid is required to deliver).

Waste

Drax Power is striving for zero waste to landfill by 2020 other than the disposal of asbestos and ashes, and we have been undertaking research to identify alternative disposal options for difficult waste streams.

The burning of solid fuels produces pulverised fuel ash (PFA) and furnace bottom ash (FBA). Our operations produce on average 700,000 tonnes of ash every year. To ensure that these materials are utilised as products, they are produced to conform to European construction product standards. Around 750,000 tonnes of our ash products are sold into the construction industry every year as a replacement for virgin aggregates and cements.

The ash content of compressed wood pellets is much lower than coal. Less ash is produced as we make electricity with pellets. We consider biomass ash to be a valuable product – not waste – and we are currently exploring suitable markets. Now that we are generating more than two-thirds of our electricity using compressed wood pellets rather than coal, we are producing much less coal ash. As of mid-2016, several of our coal ash customers are utilising wood pellet fly ash and we are working with universities to find new, innovative applications for it, for example within agriculture for the FBA.

We pay landfill tax on the PFA disposed at the Barlow Mound. Through the Landfill Tax Credit Scheme, we are able to claim a tax credit against our donations to recognised environmental bodies.

Gypsum is also produced as a by-product of our operations at Drax Power and is sold for use in manufacturing products such as plasterboard.

Biodiversity

At Drax Group, we actively work with others to consider biodiversity and improve our management of it. Our Group sustainability policy requires that the biomass pellets we use do not adversely affect protected or vulnerable biodiversity and gives preference to biomass production that strengthens biodiversity. Across our biomass supply chain, we carry out regional risk assessments to identify biodiverse areas which may not be adequately protected by local legislation. With this knowledge, we can ensure that our suppliers are not just complying with their own local legislation but also applying additional protective measures where appropriate.

Our Skylark Centre and Nature Reserve is open to the public and regularly offers experiences for schoolchildren to learn about nature and ecology.

We also manage and maintain Barlow Mound, the restoration of which has had a positive impact on biodiversity locally. The ash disposal site has been transformed into a mix of agricultural grazing, woodland and wild flower meadows.

Sourcing sustainable biomass

Summary performance - Drax Power Station Average Biomass Supply Chain GHG Emissions

 Unit of measure20182017201620152014   
Average biomass supply chain GHG emissionskg CO2 -eq/MWh130.74*129.74122.04113.65122.4

* Limited external assurance using the assurance standard ISAE 3000 for 2018 data as indicated. For assurance statement and basis of reporting see www.drax.com/sustainability/assurance-statement/

Summary performance - Drax Power Station Biomass Pellet Feedstock Sources in 2018

CountryCountry Total (t)Sawmill Residues (t)Branches, Tops and Bark (t)Diseased Wood (t)End of Life Timber (t)Country Percentage
Total7,171,0742,693,618915,1966991,977-
USA4,463,5931,060,480723,65261-62%
Canada1,239,3331,040,361180,575-17%
Latvia717,274342,54449199-10%
Estonia294,081119,5073,547-4%
Portugal197,24131,3887,3583791,9773%
Brazil104,850-1%
Belarus79,58177,4021458-1%
UK47,740-1%
Other European19,37313,9432-<1%
Lithuania8,0097,993<1<1-<1%
Total Percentage-38%13% <1% <1% -
CountryCountry Total (t)Thinnings (t)Low Grade Roundwood (t)Short Rotation Forestry (t)Agricultural Residues (t)Country Percentage
Total7,171,0741,418,9222,085,6241,87653,161-
USA4,463,5931,246,4171,432,98262%
Canada1,239,33318,39717%
Latvia717,274894373,58710%
Estonia294,081128,43742,5904%
Portugal197,24142,906111,3571,8763%
Brazil104,850104,8501%
Belarus79,5812601,8471%
UK47,74047,7401%
Other European19,3737<1<15421<1%
Lithuania8,009213<1%
Total Percentage-20%29%<1%<1%-

Download the complete table

Ensuring sustainable biomass

We ensure our biomass is sustainable and compliant with appropriate legislation through a combination of proactive supplier engagement, third party certification schemes and our own audits and checks. We rely on a number of forest certification programmes, including the Sustainable Forest Initiative (SFI), Forest Stewardship Council® (FSC®) – Drax FSC License Code: FSC-C119787, the Programme for the Endorsement of Forest Certification (PEFC) and Sustainable Biomass Program (SBP).

The Group sustainability policy outlines our biomass sustainability requirements. We adhere to the UK Government criteria for sustainable biomass, the Forest Europe Sustainable Forest Management criteria and we comply with the European Union Timber Regulation (EUTR).


Our biomass sustainability requirements

  • Group sustainability policy – in place since 2008, our policy covers our core sustainability values on protecting biodiversity, reduction of greenhouse gas emissions and contribution to social values.
  • UK Government criteria for sustainable biomass – we report monthly on compliance with the UK sustainability criteria, including life cycle emissions limits and the land criteria. This covers the requirements of the Forest Europe Sustainable Forest Management criteria, including: maintaining forest area and carbon stocks; encouraging the production of forest products; maintaining the health and vitality of the forest ecosystem; conserving and enhancing biological diversity; contributing socio-economic benefits; and ensuring that soil and water protection is maintained.
  • European Union Timber Regulation – in place since 2013, the EUTR requires purchasers of wood products to have coherent due diligence processes in place to minimise the risk of trading illegally logged timber.

The Group Director of Corporate Affairs has overall responsibility for delivering Drax Group’s sustainability performance and ensuring biomass meets the Government’s sustainability criteria. Cases requiring special attention are escalated to the Ethics and Business Conduct Committee or the Executive Committee.

No concerns regarding biomass supplier sustainability compliance were raised or escalated to the Ethics and Business Conduct Committee or the Executive Committee in 2018.

We are reviewing our woody biomass sourcing policy in line with the recommendations made by Forest Research in its 2018 report(1). This is to provide further assurance that the biomass we source makes a net positive contribution to climate change, protects and enhances biodiversity and has a positive social impact on local communities.

In 2018 our biomass was sourced from established, responsibly managed working forests in the USA, Canada, Europe and Brazil.

 

To enhance our biomass supply chain transparency, we provide detailed supply chain information at Drax ForestScope.


Maintaining forest carbon stocks

We source only sustainable biomass from working forests that are fully established and properly managed. Biomass can play an important role in providing markets for thinnings and low grade roundwood where few alternative uses exist. It also offers a market for material that has been damaged by natural disturbances, such as wind, fire, pests and diseases, and by-products of forest stands managed for the production of solid wood products, such as construction saw-timber and furniture.

We are committed to sourcing biomass that contributes to the long-term maintenance of growing stock and productivity and that helps to improve the health and quality of forests at a local and regional level. We monitor forest inventory data and local industry trends, in addition to certification and our auditing process, to determine whether biomass demand is having a positive impact on regional forest industries. This allows us to make informed sourcing decisions.


Our due diligence process

 

Drax has developed a rigorous process to ensure that new and existing biomass suppliers demonstrate that all sustainability and legal requirements are being met. Our eight key stages for ensuring compliance are: chain of custody; supplier audits; the EUTR legality assessment; GHG life cycle assessment and monitoring; the sustainability data return (SDR) captured in the contract; the SDR and annual declaration; regional and country risk assessments; and supplier relationship management and monitoring. These stages are implemented in an ongoing cycle to provide robust evidence across each element.

Our due diligence process always begins with a regional risk assessment, which identifies high-level risks such as deforestation or illegal logging, corruption and issues with workers’ rights. This ensures that we focus on these high risks and how they are being mitigated. These reports are renewed every three years, or more frequently if there are causes for concern, to ensure that we always stay on top of developing issues.

This is followed by the SDR, where we ask the supplier 43 detailed questions about all aspects of their supply chain and to provide documentary evidence to support their answers. This sustainability declaration subsequently forms part of the contract between Drax and the supplier.

Our supplier audit process

Each new supplier is subject to an independent audit before pellets can be delivered. Existing suppliers are audited at least once every three to four years. The audit requires the supplier to pass a series of detailed environmental and social checks along the whole length of their supply chain and pellet manufacturing process. Findings are categorised as high, medium or low priority.

High-priority findings can result in termination of a supplier agreement. Medium-priority findings result in the supplier being given a deadline for rectifying them. Low-priority issues highlight areas where our independent auditors believe there is scope for the supplier to improve their practices. Drax engages with our suppliers to share best practice and support and encourage improvements to procedures.

The Sustainable Biomass Program

Alternatively, suppliers can evidence the necessary sustainability requirements through Sustainable Biomass Program (SBP) certification, as SBP-certified material has been benchmarked by Ofgem to fully meet the UK sustainability requirements. If a supplier is SBP certified, Drax does not require an audit to be carried out and the supplier can progress through the process much faster.

We encourage our suppliers to move from our own audits and checks towards SBP certification. In Q4 2018 92% of our woody biomass sourced was SBP certified. This resulted in us achieving our target of sourcing 90% SBP-certified biomass fuel by the end of 2018.

100% of our biomass is legally and sustainably sourced

Forest management certification

In addition to the Drax internal process and third party SBP certification, sustainability can also be demonstrated through the Forest Stewardship Council® (FSC®) – Drax FSC License Code: FSC-C119787 – and PEFC’s Forest Management (FM) certification. These schemes are global not-for-profit organisations dedicated to the promotion of responsible forest management worldwide. FM certification process confirms that the forest is being managed in a way that preserves the natural ecosystem and benefits the lives of local people and workers, while ensuring that it sustains economic viability.

FM certification may be difficult to achieve for some types of forest owners and, for this reason, a secondary level of FSC certification called Controlled Wood is available. This ensures that wood fibre is not: illegally harvested; harvested in violation of traditional and human rights; harvested in forests in which high conservation values are threatened by management activities; harvested in forests being converted to plantations or non-forest use; or from forests in which genetically modified trees are planted.

American Tree Farm

Chain of custody

Once certified, Chain of Custody can be used as a mechanism for tracking wood fibre from the forest to the final product and destination. Each supplier in the chain must have a documented system that enables the supplier to demonstrate that the wood fibre has been identified and separated from non-certified and non-controlled wood at each stage in the supply chain. Drax requires that all of its suppliers achieve Chain of Custody certification before contracts are signed and pellets can be delivered.

At Drax Power, our key biomass buyers, logistics, legal and communications employees are required to complete Chain of Custody training with the sustainability team.

Managing supplier relationships

Drax operates a proactive supplier engagement programme to develop closer relationships with all biomass suppliers on sustainability issues. Our approach includes regular site visits to improve overall performance by identifying any potential risks, understanding constraints and capacity, monitoring audit findings and corrective actions, carrying out training and providing resources as required.

Working with our suppliers

Biomass supply chain emissions

We monitor each step in the supply chain to ensure that our requirements are being met and that greenhouse gas (GHG) emissions associated with producing our biomass are calculated according to the regulatory requirements.

Emissions from each stage and in each different supply region are calculated and reported. The Renewables Obligation sets out the basis on which Drax is required to determine and report on the life cycle GHG emissions associated with its supply chain. Every supplier is required to give detailed information on what type of fibre is used to make wood pellets along with full details of their sources, the distances and vehicle types involved in their production, the production process itself, data about fuel and energy usage, plus any sea freight data (including what type of vessel was used, over which route, and over what distance). GHG calculations are carried out for all material consumed by us using the UK Solid and Gaseous Biomass Carbon Calculator which uses the methodology prescribed in the EU Renewable Energy Directive, which is reported each month to the Office of Gas and Electricity Markets (Ofgem).

GHG emissions are affected by a wide range of factors including cultivation, harvesting and transportation. The majority of our pellets are shipped to the UK from North America. The most significant GHG impacts in the biomass supply chain are the electricity used in pelletisation and the sea freight emissions in transport.

The impact of shipping emissions is determined by both distance and vessel size. For longer distances (e.g. from North America) it is essential to use large-scale vessels capable of transporting more than 40,000 tonnes of wood pellets (sometimes up to 60,000 tonnes); this significantly reduces the emissions per tonne of wood pellets. Within Europe, shipping distances are much shorter and therefore smaller vessels can be utilised, which allows vessels to access small ports that can reduce inland transportation.

Drax uses specially designed rail wagons to transport the biomass pellets direct from port to the power station. This is dramatically more carbon efficient than road transport. Pellet mills are ideally located close to the forest resource and close to ports in order to minimise inland transport emissions.

The UK Government has set a limit on the maximum supply chain GHG emissions permitted for sustainable biomass to be eligible for support under the Renewables Obligation. The current limit is 285 kgCO2-eq/MWh of electricity, reducing to 200 kgCO2-eq/MWh of electricity in 2020. In 2018, our average biomass supply chain GHG emissions amounted to 131 kgCO2-eq/MWh* of electricity. This is consistent with our 2017 average biomass supply chain GHG emissions.

* Limited external assurance using the assurance standard ISAE 3000 for 2018 data as indicated. For assurance statement and basis of reporting see www.drax.com/sustainability/assurance-statement/

  • 1 Robert Matthews, Geoff Hogan and Ewan Mackie (2018), Carbon impacts of biomass consumed in the EU: Supplementary analysis and interpretation for the European Climate Foundation.

Sourcing coal

 

Whilst we transition away from coal, we must continue to secure reliable and responsible sources of coal. Our coal sourcing approach is strictly governed by our compliance, sustainability and risk teams. Drax’s corporate social responsibility (CSR) statement sets out the legal, ethical, environmental and social standards we expect of our suppliers. Requirements are also set out in our contracts, including our preference for Bettercoal.

The Bettercoal initiative

We buy coal only from known sources and from suppliers that are transparent about origin mines. Any jurisdictions we source from are vetted against our policies. In 2018, 24% of the coal we used came from UK deep and surface mines, with the remainder coming predominantly from the US, Colombia and Russia. Where possible, we use pond fines (the filtered residue of coal washings) and other advantaged fuels to reduce the amount of raw coal extracted and burned.

As we look to the future, coal sourcing will continue to be governed by our focus on responsible sourcing. Origins will be determined by balancing quality and economics. Where possible, we source from Bettercoal-engaged mines.

We carry out due diligence to ensure coal is supplied in line with our CSR statement and carry out visits to suppliers’ sites. Where our checks raise any “red flags” we undertake enhanced due diligence and commission third party investigations. Results and concerns are reviewed by Drax’s Ethics and Business Conduct Committee if necessary.

Partnering with others to raise standards

We work with a range of stakeholders to improve standards in the coal industry. For example, we engage with coal suppliers through conferences and through our membership of industry initiatives such as Bettercoal.

The Bettercoal initiative works with coal suppliers to encourage continuous improvements in social, ethical and environmental standards. Suppliers complete a self-assessment process and are independently audited against the Bettercoal Code by approved assessors. We make it clear in supplier contracts that we prefer to source Bettercoal. Results from Bettercoal assessments form part of our supply chain due diligence procedures and any new information on suppliers is reviewed by Drax’s procurement and compliance teams.

As a member of the Bettercoal Members Working Group, we collaborate with other members to further develop rigorous procedures, protocols and assurance in the Bettercoal system.