Tag: BECCS (bioenergy with carbon capture and storage)

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.

How is carbon stored?

13 January 2022

Carbon capture

Carbon storage is the process of capturing and trapping that CO2. This can occur naturally in the form of carbon sinks like forests, oceans, and soils that store carbon. However, it can also be manually carried out through technology.   

One of the most well-established ways of storing carbon through the use of technology is by injecting CO2 into naturally occurring geological formations that can lock in or sequester the molecule on a permanent basis. Carbon storage is the final phase of the carbon capture, usage, and storage (CCUS) process.

Why do we need to store carbon?

Global bodies like the UN’s Intergovernmental Panel on Climate Change (IPCC), as well as the UK’s own Climate Change Committee, emphasise carbon capture and storage as crucial to achieving net zero emissions and meeting the Paris Agreement’s goal of limiting temperature rises to within 1.5oC.

This includes supporting forest growth through afforestation and reforestation, and other nature-based solutions to store carbon, alongside CCUS technology.

The European Commission also highlights CCUS’s role in balancing increased energy demand and continued fossil fuel use in the future, with the need to reduce greenhouse gas emissions and prevent them entering the atmosphere.

How is carbon captured and transported to storage?

In naturally occurring examples, forests and ocean fauna absorb carbon through photosynthesis. When the vegetation eventually decomposes the carbon is sequestered into soil and seabeds.

Carbon can also be captured from emissions sources such as factories or power plants. The carbon is captured either pre-combustion, where it is removed from the fuel source, or post-combustion, where it is removed from exhaust fumes in the form of CO2.

The CO2 is then converted into a supercritical state where it has the viscosity of a gas but the density of a liquid, meaning it can travel more easily through pipelines. It can also be transported via trucks and ships, but pipelines are the most efficient.

Where can carbon be stored?

Natural carbon sinks differ all over the world, from peatlands in Scotland to Pacific coral reefs to the massive forests that cover countries like Russia, Canada, and Brazil. Wooden buildings also act as carbon storage as they maintain the carbon within the wood for long time periods.

The CO2 captured by manmade technologies can also be stored in different types of geological formation: unused natural gas reserves, saline aquifers, and un-minable coal mines.

The North Sea, with its expansive layers of porous sandstone, also offers the UK alone an estimated 70 billion tonnes of potential CO2 storage space.

If negative emissions technologies (which actively remove emissions from the atmosphere) were to capture and store the equivalent amount of CO2 as the 258 million tonnes expected to remain in the UK economy in 2050, it would take up just 0.36% of the available storage space.

Years of research by the oil and gas industries mean many such geological structures have been mapped and are well understood all around the world.

Carbon storage fast facts

How is the carbon kept in place?

In nature-based carbon sinks the carbon does not always remain in one location. In a forest, for example, trees and plants will hold carbon until the end of their lifetime after which they decompose, releasing some CO2 into the atmosphere while some is sequestered into soil.

When CO2 captured through CCUS is stored several things can happen to it in a geological storage site. It can be caught in the minute intervening spaces within the rock through capillary action, or trapped by a layer of impermeable cap-rock, which prevents it from moving upwards.

CO2 may also dissolve in the water and then sinks as it is heavier than normal water. The carbonated water reacts with basaltic rocks which cover most of the ocean floor. The reaction releases elements like calcium, magnesium, and iron into the water stream. Over time, these elements combine with the dissolved CO2 to form stable carbonate minerals that permanently fill pores within the rock.

How does CO2 enter the storage sites?

The CO2 is injected into the porous rocks of depleted or unused natural gas or oil reserves, as well as saline aquifers – geologic strata, filled with brine or saline water. Porous rock is filled with holes and gaps between the grains that make up the rock. When CO2 is injected into these structures, the CO2 floods the pores, displacing the brine or remnants of oil and gas. It then spreads out and is trapped in the dome-like structures of the rock strata called anticlines.

How long can CO2 be stored?

Appropriately selected and maintained geological reservoirs are “very likely” to retain 99% of sequestered carbon for more than 100 years and are “likely” to retain 99% of sequestered carbon for more than 1,000 years, according to the 2005 Special Report on CCS by the IPCC. Another study by Nature found that more than 98% of injected CO2 will remain stored for over 10,000 years.

In natural carbon sinks, the length of time that carbon is stored varies and depends on environments being preserved. Peatland, for example, builds up over thousands of years storing carbon. However, as peatlands degrade from attempts to drain them to create arable land, as well as peat extraction for fuel, they begin to emit CO2. The lifecycle of a tree by contrast is relatively short before it decomposes and releases some CO2 back into the atmosphere.

The ability for geological storage to contain CO2 for millennia means it can truly remove and permanently store emissions.

Go deeper

Forests, net zero and the science behind biomass

22 December 2021

Sustainable bioenergy

Tackling climate change and spurring a global transition to net zero emissions will require collaboration between science and industry. New technologies and decarbonisation methods must be rooted in scientific research and testing.

Drax has almost a decade of experience in using biomass as a renewable source of power. Over that time, our understanding around the effectiveness of bioenergy, its role in improving forest health and ability to deliver negative emissions, has accelerated.

Research from governments and global organisations, such as the UN’s Intergovernmental Panel on Climate Change (IPCC) increasingly highlight sustainably sourced biomass and bioenergy’s role in achieving net zero on a wide scale.

The European Commission has also highlighted biomass’ potential to provide a solution that delivers both renewable energy and healthy, sustainably managed forests.  Frans Timmermans, the executive vice-president of the European Commission in charge of the European Green Deal has emphasised it’s importance in bringing economies to net zero, saying: “without biomass, we’re not going to make it. We need biomass in the mix, but the right biomass in the mix.”

The role of biomass in a sustainable future

Moving away from fossil fuels means building an electricity system that is primarily based on renewables. Supporting wind and solar, by providing electricity at times of low sunlight or wind levels, will require flexible sources of generation, such as biomass, as well as other technologies like increased energy storage.

In the UK, the Climate Change Committee’s (CCC) Sixth Carbon Budget report lays out its Balanced Net Zero Pathway. In this lead scenario, the CCC says that bioenergy can reduce fossil emissions across the whole economy by 2 million tonnes of CO2 or equivalent emissions (MtCO2e) per year by 2035, increasing to 2.5 MtCO2e in 2045.

Foresters in working forest, Mississippi

Foresters in working forest, Mississippi

Biomass is also expected to play a crucial role in supplying biofuels and hydrogen production for sectors of the global economy that will continue to use fuel rather than electricity, such as aviation, shipping and industrial processes. The CCC’s Balanced Net Zero Pathway suggest that enough low-carbon hydrogen and bioenergy will be needed to deliver 425 TWh of non-electric power in 2050 – compared to the 1,000 TWh of power fossil fuels currently provide to industries today.

However, bioenergy can only be considered to be good for the climate if the biomass used comes from sustainably managed sources. Good forest management practises ensure that forests remain sustainable sources of woody biomass and effective carbon sinks.

A report co-authored by IPCC experts examines the scientific literature around the climate effects (principally CO2 abatement) of sourcing biomass for bioenergy from forests managed according to sustainable forest management principles and practices.

The report highlights the dual impact managed forests contribute to climate change mitigation by providing material for forest products, including biomass that replace greenhouse gas (GHG)-intensive fossil fuels, and by storing carbon in forests and in long-lived forest products.

The role of biomass and bioenergy in decarbonising economies goes beyond just replacing fossil fuels. The addition of carbon capture and storage (CCS) to bioenergy to create bioenergy with carbon capture and storage (BECCS) enables renewable power generation while removing carbon from the atmosphere and carbon cycle permanently.

The negative emissions made possible by BECCS are now seen as a fundamental part of many scenarios to limit global warming to 1.5oC above pre-industrial levels.

BECCS and the path to net zero

The IPCC’s special report on limiting global warming to 1.5oC above pre-industrial levels, emphasises that even across a wide range of scenarios for energy systems, all share a substantial reliance on bioenergy – coupled with effective land-use that prevents it contributing to deforestation.

The second chapter of the report deals with pathways that can bring emissions down to zero by the mid-century. Bioenergy use is substantial in 1.5°C pathways with or without CCS due to its multiple roles in decarbonising both electricity generation and other industries that depend on fossil fuels.

However, it’s the negative emissions made possible by BECCS that make biomass  instrumental in multiple net zero scenarios. The IPCC report highlights BECCS alongside the associated afforestation and reforestation (AR), that comes with sustainable forest management, are key components in pathways that limit climate change to 1.5oC.

Graphic showing how BECCS removes carbon from the atmosphere. Click to view/download

There are two key factors that make BECCS and other forms of emissions removals so essential: The first is their ability to neutralise residual emissions from sources that are not reducing their emissions fast enough and those that are difficult or even impossible to fully decarbonise. Aviation and agriculture are two sectors vital to the global economy with hard-to-abate emissions. Negative emissions technologies can remove an equivalent amount of CO2 that these industries produce helping balance emissions and progressing economies towards net zero.

The second reason BECCS and other negative emissions technologies will be so important in the future is in the removal of historic CO2 emissions. What makes CO2 such an important GHG to reduce and remove is that it lasts much longer in the atmosphere than any other. To help reach the Paris Agreement’s goal of limiting temperature rises to below 1.5oC removing historic emissions from the atmosphere will be essential.

In the UK, the  CCC’s 2018 report ‘Biomass in a low-carbon economy’ also points to BECCS as both a crucial source of energy and emissions abatement.

It suggests that power generation from BECCS will increase from 3 TWh per year in 2035 to 45 TWh per year in 2050. It marks a sharp increase from the 19.5 TWh that biomass (without CCS) accounted for across 2020, according to Electric Insights data. It also suggests that BECCS could sequester 1.1 tonnes of CO2 for every tonne of biomass used, providing clear negative emissions.

However, the report makes clear that unlocking the potential of bioenergy and BECCS is only possible when biomass stocks are managed in a sustainable way that, as a minimum requirement, maintains the carbon stocks in plants and soils over time.

With increased attention paid to forest management and land use, there is a growing body of evidence that points to bioenergy as a win-win solution that can decarbonise power and economies, while supporting healthy forests that effectively sequester CO2.

How bioenergy ensures sustainable forests

Biomass used in electricity generation and other industries must come from sustainable sources to offer a renewable, climate beneficial [or low carbon] source of power.

UK legislation on biomass sourcing states that operators must maintain an adequate inventory of the trees in the area (including data on the growth of the trees and on the extraction of wood) to ensure that wood is extracted from the area at a rate that does not exceed its long-term capacity to produce wood. This is designed to ensure that areas where biomass is sourced from retain their productivity and ability to continue sequestering carbon.

Ensuring that forestland remains productive and protected from land-use changes, such as urban creep, where vegetated land is converted into urban, concreted spaces, depends on a healthy market for wood products. Industries such as construction and furniture offer higher prices for higher-quality wood. While low-quality, waste wood, as well as residues from forests and wood-industry by-products, can be bought and used to produce biomass pellets.

A report by Forest 2 Market examined the relationship between demand for wood and forests’ productivity and ability to sequester carbon in the US South, where Drax sources about two-thirds of its biomass.

The report found that increased demand for wood did not displace forests in the US South. Instead, it encouraged landowners to invest in productivity improvements that increased the amount of wood fibre and therefore carbon contained in the region’s forests.

A synthesis report, which examines a broad range of research papers,  published in Forest Ecology and Management in March of 2021, concluded from existing studies that claims of large-scale damage to biodiversity from woody biofuel in the South East US are not supported. The use of these forest residues as an energy source was also found to lead to net GHG greenhouse emissions savings compared to fossil fuels, according to Forest Research.

Importantly the research shows that climate risks are not exacerbated because of biomass sourcing; in fact, the opposite is true with annual wood growth in the US South increasing by 112% between 1953 and 2015.

Delivering a “win-win solution”

The European Commission’s JRC Science for Policy literature review and knowledge synthesis report ‘The use of woody biomass for energy production in the EU’ suggests  a win-win forest bioenergy pathway is possible, that can reduce greenhouse gas emissions in the short term, while at the same time not damaging, or even improving, the condition of forest ecosystems.

However, it also makes clear “lose-lose” situations is also a possible, in which forest ecosystems are damaged without providing carbon emission reductions in policy-relevant timeframes.

Win-win management practices must benefit climate change mitigation and have either a neutral or positive effect on biodiversity. A win-win future would see the afforestation of former arable land with diverse, naturally regenerated and dedicated industrial forests.

The report also warns of trade-offs between local biodiversity and mitigating carbon emissions, or vice versa. These must be carefully navigated to avoid creating a lose-lose scenario where biodiversity is damaged and natural forests are converted into plantations, while BECCS fails to deliver the necessary negative emissions.

In a future that will depend on science working in collaboration with industries to build a net zero future continued research is key to ensuring biomass can deliver the win-win solution of renewable electricity with negative emissions while supporting healthy forests.

Updating on ambitions for pellet plants, biomass sales and BECCS

1 December 2021

Investors
Foresters in working forest, Mississippi

Highlights

  • New targets for pellet production and biomass sales
    • Biomass pellet production – targeting 8Mt pa by 2030 (currently c.4Mt)
    • Biomass pellet sales to third parties – targeting 4Mt pa by 2030 (currently c.2Mt)
  • Continued progress with UK BECCS(1) and biomass cost reduction
    • BECCS at Drax Power Station – targeting 8Mt pa of negative CO2 emissions by 2030
    • Biomass cost reduction – continuing to target biomass production cost of $100/t(2)
  • £3bn of investment in opportunities for growth 2022 to 2030
    • Pellet production, UK BECCS and pumped storage
    • Self-funded and significantly below 2x net debt to Adjusted EBITDA(3) in 2030
  • Development of additional investment opportunities for new-build BECCS
    • Targeting 4Mt pa of negative CO2 emissions outside of UK by 2030
  • Targeting returns significantly in excess of the Group’s cost of capital

Will Gardiner, Drax Group CEO, said:

Drax Group CEO Will Gardiner

Will Gardiner, CEO, Drax Group. Click to view/download.

“Drax has made excellent progress during 2021 providing a firm foundation for further growth. We have advanced our BECCS project – a vital part of the East Coast Cluster that was recently selected to be one of the UK’s two priority CCS projects. And we’re now setting out a strategy to take the business forward, enabling Drax to make an even greater contribution to global efforts to reach net zero.

“We believe Drax can deliver growth and become a global leader in sustainable biomass and negative emissions and a UK leader in dispatchable, renewable generation. We aim to double our sustainable biomass production capacity by 2030 – creating opportunities to double our sales to Asia and Europe, where demand for biomass is increasing as countries transition away from coal.

“As a global leader in negative emissions, we’re going to scale up our ambitions internationally. Drax is now targeting 12 million tonnes of carbon removals each year by 2030 by using bioenergy with carbon capture and storage (BECCS). This includes the negative emissions we can deliver at Drax Power Station in the UK and through potential new-build BECCS projects in North America and Europe, supporting a new sector of the economy, which will create jobs, clean growth and exciting export opportunities.”

Capital Markets Day

Drax is today hosting a Capital Markets Day for investors and analysts.

Will Gardiner and members of his leadership team will update on the Group’s strategy, market opportunities and development projects. The day will outline the significant opportunities Drax sees to grow its biomass supply chain, biomass sales and BECCS, as well as long-term dispatchable generation from biomass and pumped storage.

Purpose and ambition

The Group’s purpose is to enable a zero carbon, lower cost energy future and its ambition is to be a carbon negative company by 2030. The Group aims to realise its purpose and ambition through three strategic pillars, which are closely aligned with global energy policies, which increasingly recognise the unique role that biomass can play in the fight against climate change.

Strategic pillars

  • To be a global leader in sustainable biomass pellets
  • To be a global leader in negative emissions
  • To be a leader in UK dispatchable, renewable generation

The development of these pillars remains underpinned by the Group’s continued focus on safety, sustainability and biomass cost reduction.

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.

The Group has 13 operational pellet plants with nameplate capacity of c.4Mt, plus a further two plants currently commissioning and other developments/expansions which will increase this to c.5Mt once complete.

Drax is targeting 8Mt of production capacity by 2030, which will require the development of over 3Mt of new biomass pellet production capacity. To deliver this additional capacity Drax is developing a pipeline of organic projects, principally focused on North America. Drax expects to take a final investment decision on 0.5-1Mt of new capacity in 2022, targeting returns significantly in excess of the Group’s cost of capital.

Underpinned by this expanded production capacity, Drax aims to double sales of biomass to third parties to 4Mt pa by 2030, developing its market presence in Asia and Europe, facilitated by the creation of new business development teams in Tokyo and London.

Drax is a major producer, supplier and user of biomass, active in all areas of the supply chain with long-term relationships and almost 20 years of experience in biomass operations. The Group’s innovation in coal-to-biomass engineering, supply chain management and leadership in negative emissions can be deployed alongside its large, reliable and sustainable supply chain to support customer decarbonisation journeys with long-term partnerships.

Drax expects to sell all the biomass it produces, based on an appropriate market price, typically with long-term index-linked contracts.

Continued focus on cost reduction

In 2018 the Group’s biomass production cost was $166/t(2). At the H1 2021 results, through a combination of fibre sourcing, operational improvements and capacity expansion (including the acquisition of Pinnacle Renewable Energy Inc), the production cost had reduced to $141/t(2). Drax’s aims to use the combined expertise of Drax and Pinnacle to apply learnings and cost savings across its portfolio and continues to target $100/t(2) (£50/MWh equivalent(4)) by 2027.

A Global leader in negative emissions

The Intergovernmental Panel on Climate Change(5) and the Coalition for Negative Emissions(6) have both outlined a clear role for BECCS in delivering the negative emissions required to limit global warming to 1.5oC above pre-industrial levels and to achieve net zero by 2050, identifying a requirement of between 2bn and 7bn tonnes of negative emissions globally from BECCS.

Separately, the UK Government has recently published its Net Zero Strategy and Biomass Policy Statement reaffirming the established international scientific consensus that sustainable biomass is renewable and that it will play a critical role in helping the UK achieve its climate targets. It also signposted an ambition for at least 5Mt pa of negative emissions from BECCS and Direct Air Capture by 2030, 23Mt pa by 2035 and up to 81Mt pa by 2050. The reports commit the Government to the development during 2022 of a financial model to support BECCS to meet these requirements.

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.

The Group aims to build on this innovation with a new target to deliver 4Mt of negative CO2 emissions pa from new-build BECCS outside of the UK by 2030 and is currently developing models for North American and European markets.

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.

Long-term biomass generation and pumped storage hydro can provide these increasingly important services. Drax Power Station is the UK’s largest source of renewable power by output and the largest dispatchable plant. The Group is continuing to develop a lower cost operating model for this asset, supported by a reduction in fixed costs associated with the end of coal operations.

Drax is also developing an option for new pumped storage – Cruachan II – which could take a final investment decision in 2024 and be operational by 2030, providing an additional 600MW of dispatchable long-duration storage to the power system.

In its Smart Systems and Flexibility plan (July 2021), the UK Government described long-duration storage technologies as essential for achieving net zero and has committed to take actions to de-risk investment for large-scale and long-duration storage.

Capital allocation and dividend

Strategic capital investment (3Mt of new biomass pellet production capacity, BECCS at Drax Power Station and Cruachan II) is expected to be in the region of £3bn between 2022 and 2030, backed by long-term contracted cashflows and targeting high single-digit returns and above.

No final investment decision has been taken on any of these projects and both BECCS and Cruachan II remain subject to further clarity on regulatory and funding mechanisms.

The Group believes these investments can be self-funded through strong cash generation over the period with net debt to Adjusted EBITDA significantly below 2x at the end of 2030, providing flexibility to support further investment, such as new-build BECCS as these options develop.

Drax remains committed to the capital allocation policy established in 2017, noting that average annual dividend growth was around 10% in the last 5-years.

Webcast and presentation material

The event will be webcast from 10.00am and the material made available on the Group’s website from 7:00am. Joining instructions for the webcast and presentation are included in the links below.

https://secure.emincote.com/client/drax/drax016

Notes:
(1) BioEnergy Carbon Capture and Storage.
(2) Free on Board – cost of raw fibre, processing into a wood pellet, delivery to Drax port facilities in US and Canada, loading to vessel for shipment and overheads.
(3) Earnings before interest, tax, depreciation, amortisation, excluding the impact of exceptional items and certain remeasurements.
(4) From c.£75/MWh in 2018 to c.£50/MWh, assuming a constant FX rate of $1.45/£.
(5) Coalition for Negative Emissions (June 2021).
(6) Intergovernmental Panel on Climate Change (August 2021).

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

Forward Looking Statements
This announcement may contain certain statements, expectations, statistics, projections and other information that are or may be forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plans, investments, beliefs and objectives for the management of future operations of Drax Group plc (“Drax”) and its subsidiaries (the “Group”), including in respect of Pinnacle Renewable Energy Inc. (“Pinnacle”), together forming the enlarged business, are not warranted or guaranteed. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. Although Drax believes that the statements, expectations, statistics and projections and other information reflected in such statements are reasonable, they reflect the Company’s current view and beliefs and no assurance can be given that they will prove to be correct. Such events and statements involve significant risks and uncertainties. Actual results and outcomes may differ materially from those expressed or implied by those forward-looking statements. There are a number of factors, many of which are beyond the control of the Group, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These include, but are not limited to, factors such as: future revenues being lower than expected; increasing competitive pressures in the industry; and/or general economic conditions or conditions affecting the relevant industry, both domestically and internationally, being less favourable than expected; change in the policy of key stakeholders, including governments or partners or failure or delay in securing the required financial, regulatory and political support to progress the development of Drax and its operations. We do not intend to publicly update or revise these projections or other forward-looking statements to reflect events or circumstances after the date hereof, and we do not assume any responsibility for doing so.

END

2021 Adjusted EBITDA around top of current analyst expectations

Investors

Highlights

  • Major planned outage on CfD(1) unit completed on schedule
  • Incremental power sales on biomass ROC(2) units since July 2021 capturing higher prices
  • Commissioning of 550Kt of new biomass pellet production capacity in US Southeast
  • 2021 Adjusted EBITDA(3) – around the top end of current range of analyst expectations, subject to continued baseload generation on biomass units throughout December
  • Positive policy developments for biomass and framework for UK BECCS(4)

Pellet Production

In North America, the Group has made good progress integrating Pinnacle Renewable Energy Inc. (“Pinnacle”) since acquisition in April 2021 and is currently in the final stages of commissioning over 360Kt of new production capacity at Demopolis, Alabama. In October 2021, the Group commissioned a 150Kt expansion at its LaSalle plant in Louisiana and at Leola, Arkansas, a new 40Kt satellite plant is due to be commissioned in December.

These developments, along-side incremental new capacity in 2022, support the Group’s continued focus on production capacity expansion and cost reduction. Once fully commissioned, Drax will operate around 5Mt of production capacity across three major North American fibre baskets – British Columbia, Alberta and the US Southeast, of which around 2Mt are contracted to high-quality third-party counterparties under long-term contracts, with the balance available for Drax’s own-use requirements.

There has been no disruption to own-use or third-party volumes from the global supply chain delays currently being experienced in some other sectors. However, as outlined at the Group’s 2021 Half Year Results, summer wildfires led to pellet export restrictions in Canada. More recently, heavy rainfall and flooding in British Columbia have led to some further disruption to rail movements and regional supply chains. Through its enlarged and diversified supply chain Drax has been able to manage and limit the impact on biomass supply for own-use and to customers.

In addition, due to the Group’s active and long-term hedging of freight costs, there has been no material impact associated with higher market prices for ocean freight. The Group uses long-term contracts to hedge its freight exposure on biomass for its Generation business, and following the acquisition of Pinnacle, is taking steps to optimise freight requirements between production centres in the US Southeast and Western Canada, and end markets in Asia and Europe.

Generation

In the UK, the Group’s biomass and pumped storage generation assets have continued to play an important role providing stability to the UK power system at a time when higher gas prices, European interconnector issues, and periods of low wind have placed the system under increased pressure. The Group’s strong forward sold position means that it has not been a significant beneficiary of higher power prices from these activities in 2021 but has been able to increase forward hedged prices in 2022 and 2023.

In March, the Group’s two legacy coal units ended commercial generation activities and will formally close in September 2022 following the fulfilment of their Capacity Market obligations. Reflecting the system challenges described above, these units were called upon in the Balancing Mechanism by the system operator for limited operations in September and November. These short-term measures helped to stabilise the power system during periods of system stress and have not resulted in any material increase in the Group’s total carbon emissions.

In September, the Generation business experienced a two-week unplanned outage on one biomass unit operating under the ROC scheme. The unit’s contracted position in this period was bought back and the generation reprofiled across the two unaffected biomass ROC units and deferred until the fourth quarter. During this period, the Group’s pumped storage power station (Cruachan) provided risk mitigation from the operational or financial impact of any additional forced outages.

In November, the Generation business successfully completed a major 98 day planned outage on its biomass CfD unit, which included the third in a series of high-pressure turbine upgrades. Drax now expects the unit to benefit from thermal efficiency improvements and lower maintenance costs, incrementally reducing the cost of biomass generation at Drax Power Station.

Customers

The Group continues to expect the Customers business will return to profitability at the Adjusted EBITDA level for 2021, inclusive of an expected increase in mutualisation costs associated with the failure of a number of energy supply businesses in the second half of 2021. Separately, the Group is continuing to assess operational and strategic solutions to support the development of the SME(5) supply business.

Full year expectations

Reflecting these factors, the Group now expects that full year Adjusted EBITDA for 2021 will be around the top of the range of current analyst expectations(6), subject to good operational performance during December, including baseload running of all four biomass units. The Group’s financial expectations do not include any Balancing Mechanism activity in December for the coal units.

Drax continues to expect net debt to Adjusted EBITDA to return to around 2x by the end of 2022.

Negative emissions

In October, the UK Government selected the East Coast Cluster and Hynet as the first two regional clusters in the UK to take forward the development of the infrastructure required for carbon capture and storage. In addition, the UK Government published its Net Zero Strategy and Biomass Policy Statement, reaffirming the established international scientific consensus that sustainable biomass is renewable and indicating that it will play a critical role in helping the UK achieve its climate targets. It also signposted an ambition for at least 5Mt pa of negative emissions from BECCS and Direct Air Capture by 2030, 23Mt pa by 2035 and up to 81Mt pa by 2050. The reports commit the Government to the development during 2022 of a financial model to support the development of BECCS to meet these requirements.

The Group is continuing to progress its work on BECCS with the aim to develop 8Mt of negative CO2 emissions pa at Drax Power Station by 2030 and expects to make a decision on the commencement of a full design study in the coming weeks.

Generation contracted power sales

As at 25 November 2021, Drax had 34.3TWh of power hedged between 2021 and 2023 at £61.3/MWh as follows:

202120222023
Fixed price power sales (TWh)16.012.45.8
Of which ROC (TWh)10.810.15.8
Of which CfD (TWh)(7)(8)3.82.1-
Other (TWh)1.40.2-
Average achieved price (£ per MWh)54.070.7 61.2
Of which ROC (£ per MWh)56.961.161.2
Of which CfD (£ per MWh)(7)47.3118.3-
Of which Other (£ per MWh)50.058.2-

Since the Group’s last update on 29 July 2021, incremental power sales from the ROC units were 3.3TWh between 2022 and 2023, at an average price of £98.7/MWh.

Notes:
(1) Earnings before interest, tax, depreciation, amortisation, excluding the impact of exceptional items and certain remeasurements.
(2) BioEnergy Carbon Capture and Storage.
(3) Renewable Obligation Certificate.
(4) Contract for Difference.
(5) Small and Medium-size Enterprise.
(6) As at 26 November 2021 analyst consensus for 2021 Adjusted EBITDA was £380 million, with a range of £374-£391 million. The details of this company collected consensus are displayed on the Group’s website.
(7) The CfD biomass unit typically operates as a baseload unit, with power sold forward against a season ahead reference price. The CfD counterparty pays the difference between the season ahead reference price and the strike price. The contracted position therefore only includes CfD volumes and prices for the front six months.
(8) Expected annual CfD volumes of around 5TWh. Lower level of generation in 2021 unit due to major planned outage.

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

Forward Looking Statements
This announcement may contain certain statements, expectations, statistics, projections and other information that are or may be forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plans, investments, beliefs and objectives for the management of future operations of Drax Group plc (“Drax”) and its subsidiaries (the “Group”), including in respect of Pinnacle Renewable Energy Inc. (“Pinnacle”), together forming the enlarged business, are not warranted or guaranteed. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. Although Drax believes that the statements, expectations, statistics and projections and other information reflected in such statements are reasonable, they reflect the Company’s current view and beliefs and no assurance can be given that they will prove to be correct. Such events and statements involve significant risks and uncertainties. Actual results and outcomes may differ materially from those expressed or implied by those forward-looking statements. There are a number of factors, many of which are beyond the control of the Group, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These include, but are not limited to, factors such as: future revenues being lower than expected; increasing competitive pressures in the industry; and/or general economic conditions or conditions affecting the relevant industry, both domestically and internationally, being less favourable than expected; change in the policy of key stakeholders, including governments or partners or failure or delay in securing the required financial, regulatory and political support to progress the development of Drax and its operations. We do not intend to publicly update or revise these projections or other forward-looking statements to reflect events or circumstances after the date hereof, and we do not assume any responsibility for doing so.

END

The jobs needed to build a net zero energy future

11 November 2021

Sustainable business

Many components are needed to tackle climate change and reach environmental milestones such as meeting the goals of the Paris Agreement. One of those components is the right workforce, large enough and with the necessary skills and knowledge to take on the green energy jobs of a low-carbon future. In 2020, the renewable energy sector employed 11.5 million people around the world, but as the industry continues to expand that workforce will only grow.

Last year, a National Grid report found that in the UK alone, 120,000 jobs will need to be filled in the low-carbon energy sector by 2030, to meet the country’s climate objectives. That figure is expected to rise to 400,000 by 2050.  The UK energy sector as a whole currently supports 738,000 jobs and much of this workforce already has the skills needed for a low carbon society . Others can be reskilled and retrained, helping to bolster the future workforce by supporting employees through the green transition.

At a global level energy sector jobs are expected to increase from 18 million to 26 million by 2050. Jobs that will span the full energy spectrum; from researching and advising on low-carbon solutions to installing and implementing them.

Here are some of the roles that will be key to the low-carbon energy transformation:

A wind farm under construction off the English coast

Wind turbine technicians

According to the International Energy Agency (IEA), wind power is this year set for a 17% increase in global energy generation compared to 2020, the biggest increase of any renewable power source. The IEA also forecasts that wind power will need to grow tenfold by 2050 if the world is to meet the goals of the Paris Agreement. It’s not surprising, therefore, that wind turbine technicians – the professionals who install, inspect, maintain, and repair wind turbines – are in high demand. In the US, wind turbine technician is the fastest-growing job in the country – with 68% growth projected over the 2020-2030 period – to give just one example.

In the UK, many wind turbine technicians have a background in engineering or experience from the wider energy sector. Although there are wind turbine technician and maintenance courses available, they are not a prerequisite, and many employers offer apprenticeships and on-the-job training – smoothing the path for energy professionals to transition into the role.

Solar panel installers

Today, solar photovoltaic (solar PV) is the biggest global employer in renewable energy, accounting for 3.8 million jobs. The IEA also reported a 23% uptick in solar PV installations around the world in 2020. In the UK, there are currently 13.2 gigawatts (GW) of installed solar power capacity. Trade association Solar Energy UK predicts this will need to rise to at least 40 GW by 2030 if the UK is to succeed in becoming a net zero economy by 2050. The trade association believes this could see the creation of 13,000 new solar energy jobs.

Solar panel installers – who carry out the important job of installing and maintaining solar PV – are essential to a low-carbon future. Many solar panel installers in the UK come from a background in electrical installation or have transitioned from engineering. While there are training courses specifically designed for solar panel installers, they are not a necessity, particularly if you already have on-the-job experience in a relevant sector. This makes a move to becoming a solar panel installer relatively easy for someone already working in energy or with a mind for engineering.

Energy consultants

Businesses of all kinds must play a role in the transition to net zero. Organisations must be able to manage their energy use and begin switching to renewable sources. As professionals who advise companies on this process, renewable energy consultants are a key part of the green energy workforce. Aspects of the job include identifying how organisations use their electric assets and helping businesses optimise those assets to build responsiveness and flexibility into energy-intensive operations. The core responsibilities of a renewable energy consultant are to reduce a company’s environmental impact while helping the business reduce energy costs and identifying opportunities.

Carbon accountants

A growing number of businesses are setting targets for reducing their greenhouse gas (GHG) emissions. But that’s only possible if you can first determine what your GHG emissions are and where they come from, which is where the relatively young field of carbon accounting comes in. Through what is known as physical carbon accounting, companies can assess the emissions their activities generate, and where in the supply chain the emissions are occurring. This allows businesses to implement more accurate actions and be realistic in their timelines for reducing emissions.

On a wider scale, accurate carbon accounting will be crucial in certifying emissions reductions or abatement, as well as in the distribution of carbon credits or penalties as whole economies push towards net zero.

Battery technology researchers

Energy storage is essential to a low-carbon energy future.  The ability to store and release energy from intermittent sources such as wind and solar will be crucial in meeting demand and balancing a renewables-driven grid. While many forms of energy storage already exist, developing electric batteries that can be deployed at scale is still a comparatively new and expanding area.

Global patenting activities in the field of batteries and other electricity storage increased at an annual rate of 14% –  four times faster than the average for technology – between 2005 and 2018. However, it’s estimated that to meet climate objectives, the world will need nearly 10,000 GW hours of battery and other electricity storage by 2040. This is 50 times the current level and research and innovation will be crucial to delivering bigger and more efficient batteries.

Farmers and foresters

How we use and manage land will be important in lowering carbon emissions and creating a sustainable future for people and the planet. Crops like corn, sugarcane, and soybean can serve as feedstock for biofuel and bioenergy, and farming by-products such as cow manure can be used in the development of biofuel.

Techniques adopted in the agricultural sector will also be important in optimising soil sequestration capabilities while ensuring it is nutrient-rich enough to grow food. These techniques include the use of biochar, a solid form of charcoal produced by heating biomass without oxygen. Research indicates that biochar can sequester carbon in the soil for centuries or longer. It also helps soil retain water and could contribute to reducing the use of fertilisers by making the soil more nutrient-dense.

Forests, meanwhile, provide material for industries like construction, the by-products from which can serve as feedstock for woody biomass, primarily in the shape of low-grade wood that would otherwise remain unused. Sustainably managed forests, such as those from which Drax sources its biomass, have two-fold importance. They both enable woody biomass for bioenergy and ensure CO2 is removed from the atmosphere as part of the natural carbon cycle.

Biofuel engineers and scientists

Farmers and foresters provide feedstock for biofuels, but it’s biofuel scientists and engineers who research, develop, and enhance them, opening the door to alternative fuels for vehicles, heating, and even jet engines.

According to the IEA, production of biofuel that can be used as an alternative to fossil fuels in the transport sector grew 6% in 2019. However, the organisation forecasts that production will need to increase 10% annually until 2030to be in line with Paris Agreement climate targets.

Scientific innovations that can help boost the production of biofuel around the world, therefore, continues to be vital. As is the work of biofuel engineers who assess and improve existing biofuel systems and develop new ones that can replace fossil fuels like petrol and diesel.

The wealth of knowledge around fuels in the oil and gas industries means there is ample opportunity for scientists and engineers who work with fossil fuels to bring their skills to crucial low-carbon roles.

Geologists

The overriding goal of the Paris Agreement is to limit global warming to “well below” 2 and preferably to 1.5 degrees Celsius, compared to pre-industrial levels. This is an objective the IEA has said will be “virtually impossible” to fulfil without carbon capture and storage (CCS) technologies. CCS entails capturing CO2 and transporting it for safe and permanent underground storage in geological formations such as depleted oil and gas fields, coal seams, and saline aquifers.

According to the Global CCS Institute, the world will need a 100-fold increase on the 27 CCS project currently in operation by 2050. Knowledge and research into rock types, formations, and reactivity will be important in helping identify sites deep underground that can be used for safe, permanent carbon storage, and sequestration. Skills and expertise gained in the oil and gas industries will allow professionals in these sectors to make the switch from careers in fossil fuel to roles that help power a net zero economy.  

Employees working at Drax Power Station

Chemists

The role of chemists is also vital to decarbonisation. Knowledge and research around CO2 is a potent force in the effort to reduce and remove it from the atmosphere.

Technologies like CCS, bioenergy with carbon capture and storage (BECSS) and direct air carbon capture and storage (DACCS) are based around such research. Carbon capture processes are chemical reactions between emissions streams and solvents, often based on amines, and GHGs. Understanding and controlling these processes makes chemistry a key component of delivering carbon capture at the scale needed to help meet climate targets.

Chemists’ role in decarbonisation is far from limited to carbon capture methods. From battery technology to reforestation, chemists’ understanding of the elements can help drive action against climate change.

Bringing together disciplines

Tackling climate change on the scale needed to achieve the aims of the Paris Agreement depends on collaboration between industries, countries, and disciplines. Decarbonisation projects such as the UK’s East Coast Cluster, which encompasses both Zero Carbon Humber and Net Zero Teesside, fuse engineering and construction jobs with scientific and academic work.

Zero Carbon Humber, which brings together 12 organisations, including Drax, is expected to create as many as 47,800 jobs in the region by 2027. Among these are construction sector jobs for welders, pipefitters, machine installers and technicians. In addition, indirect jobs are predicted to be created across supply chains, from material manufacturing to the logistics of supporting a workforce.

Meeting climate challenges and delivering projects on the scale of Zero Carbon Humber, depends on creating an energy workforce that combines the knowledge of the past with the green energy skills of the future.

Drax’s apprenticeships have readied workers for the energy sector for decades, and will continue to do so as we build a low-carbon future. Options include four-year technical apprenticeships in mechanical, electrical, and control and instrumentation engineering. Getting on-the-job training and practical experience, apprentices receive a nationally recognised qualification, such as a BTEC or an NVQ Level 3, at the end of the programme.

Apprentices at Drax Power Station [2021]

The workforce needed to make low carbon societies a reality will be a diverse one – stretching from apprentices to experienced professionals with a background in traditional or renewable energy. It will also span every aspect of the renewable energy field, from the chemists and biofuel scientists who develop key technologies to the solar panel installers and wind turbine technicians who fit and maintain the necessary equipment.

The skills needed to take on these roles are already plentiful in the UK and around the world. Overcoming challenges on the road to net zero requires refocussing these existing talents, skills, and careers towards a new goal.

Transporting carbon – How to safely move CO2 from the atmosphere to permanent storage

15 October 2021

Carbon capture

Key points

  • Carbon capture usage and storage (CCUS) offers a unique opportunity to capture and store the UK’s emissions and help the country reach its climate goals.
  • Carbon dioxide (CO2) can be stored in geological reservoirs under the North Sea, but getting it from source to storage will need a large and safe CO2 transportation network.
  • The UK already has a long history and extensive infrastructure for transporting gas across the country for heating, cooking and power generation.
  • This provides a foundation of knowledge and experience on which to build a network to transport CO2.

Across the length of the UK is an underground network similar to the trainlines and roadways that crisscross the country above ground. These pipes aren’t carrying water or broadband, but gas. Natural gas is a cornerstone of the UK’s energy, powering our heating, cooking and electricity generation. But like the country’s energy network, the need to reduce emissions and meet the UK’s target of net zero emissions by 2050 is set to change this.

Today, this network of pipes takes fossil fuels from underground formations deep beneath the North Sea bed and distributes it around the UK to be burned – producing emissions. A similar system of subterranean pipelines could soon be used to transport captured emissions, such as CO2, away from industrial clusters around factories and power stations, locking them away underground, permanently and safely.

Conveyer system at Drax Power Station transporting sustainable wood pellets

The rise of CCUS technology is the driving force behind CO2 transportation. The process captures CO2 from emissions sources and transports it to sites such as deep natural storage enclaves far below the seabed.

Bioenergy with carbon capture and storage (BECCS) takes this a step further. BECCS uses sustainable biomass to generate renewable electricity. This biomass comes from sources, such as forest residues or agricultural waste products, which remove CO2 from the atmosphere as they grow. Atmospheric CO2 released in the combustion of the biomass is then captured, transported and stored at sites such as deep geological formations.

Across the whole BECCS process, CO2 has gone from the atmosphere to being permanently trapped away, reducing the overall amount of CO2 in the atmosphere and delivering what’s known as negative emissions.

BECCS is a crucial technology for reaching net zero emissions by 2050, but how can we ensure the CO2 is safely transported from the emissions source to storage sites?

Moving gases around safely

Moving gases of any kind through pipelines is all about pressure. Gases always travel from areas of high pressure to areas of low pressure. By compressing gas to a high pressure, it allows it to flow to other locations. Compressor stations along a gas pipeline help to maintain right the pressure, while metering stations check pressure levels and look out for leaks.

The greater the pressure difference between two points, the faster gases will flow. In the case of CO2, high absolute pressures also cause it to become what’s known as a supercritical fluid. This means it has the density of a liquid but the viscosity of a gas, properties that make it easier to transport through long pipelines.

Since 1967 when North Sea natural gas first arrived in the UK, our natural gas transmission network has expanded considerably, and is today made up of almost 290,000 km of pipelines that run the length of the country. Along with that physical footprint is an extensive knowledge pool and a set of well-enforced regulations monitoring their operation.

While moving gas through pipelines across the country is by no means new, the idea of CO2 transportation through pipelines is. But it’s not unprecedented, as it has been carried out since the 1980s at scale across North America. In contrast to BECCS, which would transport CO2 to remove and permanently store emissions, most of the CO2 transport in action today is used in oil enhanced recovery – a means of ejecting more fossil fuels from depleted oil wells. However, the principle of moving CO2 safely over long distances remains relevant – there are already 2,500 km of pipelines in the western USA, transporting as much as 50 million tonnes of CO2 a year.

“People might worry when there is something new moving around in the country, but the science community doesn’t have sleepless nights about CO2 pipelines,” says Dr Hannah Chalmers, from the University of Edinburgh. “It wouldn’t explode, like natural gas might, that’s just not how the molecule works. If it’s properly installed and regulated, there’s no reason to be concerned.”

CO2 is not the same as the methane-based natural gas that people use every day. For one, it is a much more stable, inert molecule, meaning it does not react with other molecules, and it doesn’t fuel explosions in the same way natural gas would.

CO2 has long been understood and there is a growing body of research around transporting and storing it in a safe efficient way that can make CCUS and BECCS a catalyst in reducing the UK’s emissions and future-proofing its economy.

Working with CO2 across the UK

Working with CO2 while it is in a supercritical state mean it’s not just easier to move around pipes. In this state CO2 can also be loaded onto ships in very large quantities, as well as injected into rock formations that once trapped oil and gas, or salt-dense water reserves.

Decades of extracting fossil fuels from the North Sea means it is extensively mapped and the rock formations well understood. The expansive layers of porous sandstone that lie beneath offer the UK an estimated 70 billion tonnes of potential CO2 storage space – something a number of industrial clusters on the UK’s east coast are exploring as part of their plans to decarbonise.

Source: CCS Image Library, Global CCS Institute [Click to view/download]

Drax is already running a pilot BECCS project at its power station in North Yorkshire. As part of the Zero Carbon Humber partnership and wider East Coast Cluster, Drax is involved in the development of large scale carbon storage capabilities in the North Sea that can serve the Humber and Teesside industrial clusters. As Drax moves towards its goal of becoming carbon negative by 2030, transporting CO2 safely at scale is a key focus.

“Much of the research and engineering has already been done around the infrastructure side of the project,” explains Richard Gwilliam, Head of Cluster Development at Drax. “Transporting and storing CO2 captured by the BECCS projects is well understood thanks to extensive engineering investigations already completed both onshore and offshore in the Yorkshire region.”

This also includes research and development into pipes of different materials, carrying CO2 at different pressures and temperatures, as well as fracture and safety testing.

The potential for the UK to build on this foundation and progress towards net zero is considerable. However, for it to fully manifest it will need commitment at a national level to building the additional infrastructure required. The results of such a commitment could be far reaching.

In the Humber alone, 20% of economic value comes from energy and emissions-intensive industries, and as many as 360,000 jobs are supported by industries like refining, petrochemicals, manufacturing and power generation. Putting in place the technology and infrastructure to capture, transport and store emissions will protect those industries while helping the UK reach its climate goals.

It’s just a matter of putting the pipes in place.

Go deeper: How do you store CO2 and what happens to it when you do?

Landmark moments on the path to a net zero UK

Will Gardiner, Chief Executive Officer, Drax Group

10 June 2021

Opinion
Biomass domes on a sunny day

In brief

  • £75m backing for Zero Carbon Humber to develop net zero technologies
  • Accenture and World Economic Forum report says Humber could decarbonise quicker than any other UK industrial region
  • Mitsubishi Heavy Industries partners with Drax, supplying its advanced carbon capture technology, making millions of tonnes of negative emissions possible at Drax Power Station this decade
  • Deploying bioenergy with carbon capture and storage (BECCS) in the 2020s will have ‘positive spillover’ for a net zero economy, says Frontier Economics
  • Delaying BECCS until the 2030s, argues Baringa research, could increase energy system costs by £4.5bn
  • Planning consent process for BECCS at Drax from 2027 is underway, with public consulted
  • Drax and Bechtel studying global BECCS deployments

Around the world governments, industries and societies have begun to set themselves targets for reaching net zero but it is at home in the UK where real progress is starting to be made in answering some of the tougher challenges posed by the global environmental crisis.

Eyebrows were raised when the UK set itself one of the most stretching timeframes in which to decarbonise but like many business leaders, I am firmly of the belief that this ambitious target will be the catalyst to deliver the innovative thinking needed to get the planet to where it needs to be.

I was delighted to learn recently that Government has awarded the Zero Carbon Humber partnership £75 million in funding to develop world-leading net zero technologies.

MHI BECCS pilot plant within CCUS Incubation Area, Drax Power Station, North Yorkshire

MHI BECCS pilot plant within CCUS Incubation Area, Drax Power Station, North Yorkshire

Drax was one of the founder members of the Partnership and its goal is to build the world’s first net zero industrial cluster and decarbonise the North of England. Along with the other members, we worked hard to secure this Government support and it consists of money from the Department for Business, Energy & Industrial Strategy’s Industrial Decarbonisation Challenge fund, with two thirds coming from private backing. This financing is a vote of confidence from investors and highlights the Government’s commitment to developing the world’s first zero-carbon industrial cluster in the region.

Projects of this scale, backed with meaningful funding, are key to accelerating a range of technologies that will be essential to advancing decarbonisation. These include hydrogen production, carbon capture usage and storage (CCUS) and negative emissions through bioenergy with carbon capture and storage (BECCS). But more than just having a positive effect on reducing emissions, delivering this in the Humber will also support clean economic growth and future-proof vital industries.

Biomass storage domes and water cooling towers at Drax Power Station in North Yorkshire

Biomass storage domes and water cooling towers at Drax Power Station in North Yorkshire

I believe that in a similar way to how renewables have made huge strides in helping decarbonise power, a range of new technologies are now needed to decarbonise industry and industrial regions. Our work as a partnership in the Humber is establishing a landmark project for the UK and the world’s journey to net zero and clean growth.

Reaching net zero depends on a diverse range of technologies

There are many factors that will be essential for the world to reach net zero, but perhaps none more important than open collaboration and integration. Government, industry and individual businesses will need to work together and share learnings and infrastructure to be able to make true progress. This collaboration will of course take many forms, but one that is crucially important is industrial clusters, such as Zero Carbon Humber and neighbouring Net Zero Teesside.

A recent report by Accenture highlighted how vital decarbonising industrial regions will be to reaching climate goals. Industrial carbon dioxide (CO2) emissions account for as much as 11 gigatonnes, or 30% of global greenhouse gas emissions (GHG). However, the report also highlights the opportunities, both environmental and economic, in decarbonising clusters. The market for global industrial efficiency alone is expected to receive investments worth as much as $40bn, while the global hydrogen market was estimated at around $175bn in 2019.

The Humber is the UK’s largest cluster by industrial emissions, emitting 10 million tonnes of CO2 per year – more than 2% of the UK’s total GHG emissions. Pioneering projects around hydrogen production, CCUS and negative emissions through BECCS are all ready to scale in the region, beginning the task of reducing and removing emissions. The potential benefit to the regional economy could also be significant – it’s estimated these technologies could create 48,000 direct, indirect and induced jobs in the Humber region by 2027. This new £75 million in funding will allow work to gather pace on these transformational projects.

The funding will be used to obtain land rights and begin front-end engineering design (FEED) for the hydrogen facility at H2H Saltend, as well as onshore pipeline infrastructure for CO2 and hydrogen. It marks the beginning of the vital work of putting transportation systems in place that will take captured CO2 from Drax Power Station’s BECCS generating units and permanently store it under the southern North Sea’s bed.

Drax’s BECCS power generation is one of Zero Carbon Humber’s anchor projects. Our recently confirmed partnership with Mitsubishi Heavy Industries (MHI) will see its Advanced KM CDR™️ carbon capture technology deployed at Drax Power Station. The negative emissions that this long-term agreement will make possible, will enable the region to reduce its emissions faster than any other UK cluster, according to Accenture. Developing negative emissions through BECCS will help us achieve our ambition of becoming a carbon negative company by 2030. By that time, Drax Power Station could remove 8 million tonnes of CO2 from the atmosphere each year, playing a major part in helping the UK meet its climate goals.

From BECCS to a net zero UK

In March 2021, Drax kickstarted the process to gain the necessary planning permissions called a Development Consent Order (DCO) from the Government. It’s a crucial administrative step towards delivering a BECCS unit as early as 2027, and a landmark moment in developing negative emissions in the UK.

A report by Frontier Economics for Drax highlights BECCS as a necessary step on the UK’s path to decarbonisation. Developing a first-of-a-kind BECCS power plant would also have ‘positive spillover’ effects that can contribute to wider decarbonisation and a net zero economy. These include learnings and efficiencies that come from developing and operating the country’s first BECCS power station, as well as transport and storage infrastructure, which will reduce the cost of subsequent BECCS, negative emissions and other CCS projects.

However, the benefits of acting quickly and pioneering BECCS deployment at scale can only be achieved if policy is put in place to enable the right business models for BECCS and negative emissions. According to the Frontier report, intervention is needed to instil confidence in investors while also protecting consumer energy prices from spikes.

Inside MHI pilot carbon capture plant, Drax Power Station

Inside MHI pilot carbon capture plant, Drax Power Station

Failure to implement negative emissions through BECCS could also be costly. Time is of the essence for the UK to reach net zero by 2050 and research by energy consultancy Baringa, commissioned by Drax, highlights the economic cost of hesitation. Findings showed that delaying BECCS from 2027 to 2030 could increase energy system costs by more than £4.5bn over the coming decade and over £5bn by the time the UK has to reach net zero.

I believe what we are developing at Drax can become a world-leading and exportable solution for large-scale carbon negative power generation. The potential in negative emissions is economic as well as environmental, protecting thousands of jobs in the UK’s carbon-intensive industries, as well as overseas.

BECCS offers great potential for the UK to export skills, knowledge and equipment to an international market. To help establish this market we are working with engineering and construction project management firm Bechtel to explore locations globally where there is the opportunity to deploy BECCS, and identify how new-build BECCS plants can be optimised to deliver negative emissions for those regions.

Pictured L-R: Kentaro Hosomi, Chief Regional Officer EMEA, Mitsubishi Heavy Industries (MHI); Jenny Blyth, Project Analyst, Drax Group at Drax Power Station, North Yorkshire; Carl Clayton, Head of BECCS, Drax Group;

Multiple government and independent organisations have highlighted how essential negative emissions are to reaching net zero in the UK, as well as global climate goals. The recently formed Coalition for Negative Emissions aims to advance this vital industry at a global scale. By uniting a range of negative emissions providers and users from across industries, we can make it a more powerful force for decarbonisation and sustainable growth.

It will still be a long journey towards the UK’s goals, but the Government’s funding for Zero Carbon Humber, the beginning of our BECCS DCO and partnerships with MHI and Bechtel are key steps on the path to reaching net zero by 2050. I, for one, am excited to be on this journey.

What is bioenergy with carbon capture and storage (BECCS)?

18 May 2021

Carbon capture

What is bioenergy with carbon capture and storage (BECCS)? 

Bioenergy with carbon capture and storage (BECCS) is the process of capturing and permanently storing carbon dioxide (CO2) from biomass (organic matter) energy generation.

Why is BECCS important for decarbonisation? 

Sustainably sourced biomass-generated energy (bioenergy) can be carbon neutral, as plants absorb CO2 from the atmosphere as they grow. This, in turn, offsets CO2 emissions released when the biomass is combusted as fuel.

When sustainable bioenergy is paired with carbon capture and storage it becomes a source of negative emissions, as CO2 is permanently removed from the carbon cycle.

Experts believe that negative emissions technologies (NETs) are crucial to helping countries meet the long-term goals set out in the Paris Climate Agreement. As BECCS is the most scalable of these technologies this decade, it has a key role to play in combating climate change.

How is the bioenergy for BECCS generated?

Most bioenergy is produced by combusting biomass as a fuel in boilers or furnaces to produce high-pressure steam that drives electricity-generating turbines. Alternatively, bioenergy generation can use a wide range of organic materials, including crops specifically planted and grown for the purpose, as well as residues from agriculture, forestry and wood products industries. Energy-dense forms of biomass, such as compressed wood pellets, enable bioenergy to be generated on a much larger scale. Fuels like wood pellets can also be used as a substitute for coal in existing power stations.

How is the carbon captured?

BECCS uses a post-combustion carbon capture process, where solvents isolate CO2 from the flue gases produced when the biomass is combusted. The captured CO2 is pressurised and turned into a liquid-like substance so it can then be transported by pipeline.

How is the carbon stored?

Captured CO2 can be safely and permanently injected into naturally occurring porous rock formations, for example unused natural gas reservoirs, coal beds that can’t be mined, or saline aquifers (water permeable rocks saturated with salt water). This process is known as sequestration.

Over time, the sequestered CO2 may react with the minerals, locking it chemically into the surrounding rock through a process called mineral storage.

BECCS fast facts

Is BECCS sustainable?

 Bioenergy can be generated from a range of biomass sources ranging from agricultural by-products to forestry residues to organic municipal waste. During their lifetime plants absorb CO2 from the atmosphere, this balances out the CO2that is released when the biomass is combusted.

What’s crucial is that the biomass is sustainably sourced, be it from agriculture or forest waste. Responsibly managed sources of biomass are those which naturally regenerate or are replanted and regrown, where there’s a increase of carbon stored in the land and where the natural environment is protected from harm.

Biomass wood pellets used as bioenergy in the UK, for example, are only sustainable when the forests they are sourced from continue to grow. Sourcing decisions must be based on science and not adversely affect the long-term potential of forests to store and sequester carbon.

Biomass pellets can also create a sustainable market for forestry products, which serves to encourage reforestation and afforestation – leading to even more CO2 being absorbed from the atmosphere.

Go deeper:

  • The triple benefits for the environment and economy of deploying BECCS in the UK.
  • How BECCS can offer essential grid stability as the electricity system moves to low- and zero-carbon sources.
  • Producing biomass from sustainable forests is key to ensuring BECCS can deliver negative emissions.
  • 5 innovative projects where carbon capture is already underway around the world
  • 7 places on the path to negative emissions through BECCS