Tag: supply chain

What is LNG and how is it cutting global shipping emissions?

Oil tanker, Gas tanker operation at oil and gas terminal.

Shipping is widely considered the most efficient form of cargo transport. As a result, it’s the transportation of choice for around 90% of world trade. But even as the most efficient, it still accounts for roughly 3% of global carbon dioxide (CO2) emissions.

This may not sound like much, but it amounts to 1 billion tonnes of COand other greenhouse gases per year – more than the UK’s total emissions output. In fact, if shipping were a country, it would be the sixth largest producer of greenhouse gas (GHG) emissions. And unless there are drastic changes, emissions related to shipping could increase from between 50% and 250% by 2050.

As well as emitting GHGs that directly contribute towards the climate emergency, big ships powered by fossil fuels such as bunker fuel (also known as heavy fuel oil) release other emissions. These include two that can have indirect impacts – sulphur dioxide (SO2) and nitrogen oxides (NOx). Both impact air quality and can have human health and environmental impacts.

As a result, the International Maritime Organization (IMO) is introducing measures that will actively look to force shipping companies to reduce their emissions. In January 2020 it will bring in new rules that dictate all vessels will need to use fuels with a sulphur content of below 0.5%.

One approach ship owners are taking to meet these targets is to fit ‘scrubbers’– devices which wash exhausts with seawater, turning the sulphur oxides emitted from burning fossil fuel oils into harmless calcium sulphate. But these will only tackle the sulphur problem, and still mean that ships emit CO2.

Another approach is switching to cleaner energy alternatives such as biofuels, batteries or even sails, but the most promising of these based on existing technology is liquefied natural gas, or LNG.

What is LNG?

In its liquid form, natural gas can be used as a fuel to power ships, replacing heavy fuel oil, which is more typically used, emissions-heavy and cheaper. But first it needs to be turned into a liquid.

To do this, raw natural gas is purified to separate out all impurities and liquids. This leaves a mixture of mostly methane and some ethane, which is passed through giant refrigerators that cool it to -162oC, in turn shrinking its volume by 600 times.

The end product is a colourless, transparent, non-toxic liquid that’s much easier to store and transport, and can be used to power specially constructed LNG-ready ships, or by ships retrofitted to run on LNG. As well as being versatile, it has the potential to reduce sulphur oxides and nitrogen oxides by 90 to 95%, while emitting 10 to 20% less COthan heavier fuel alternatives.

The cost of operating a vessel on LNG is around half that of ultra-low sulphur marine diesel (an alternative fuel option for ships aiming to lower their sulphur output), and it’s also future-proofed in a way that other low-sulphur options are not. As emissions standards become stricter in the coming years, vessels using natural gas would still fall below any threshold.

The industry is starting to take notice. Last year 78 vessels were fitted to run on LNG, the highest annual number to date.

One company that has already embraced the switch to LNG is Estonia’s Graanul Invest. Europe’s largest wood pellet producer and a supplier to Drax Power Station, Graanul is preparing to introduce custom-built vessels that run on LNG by 2020.

The new ships will have the capacity to transport around 9,000 tonnes of compressed wood pellets and Graanul estimates that switching to LNG has the potential to lower its COemissions by 25%, to cut NOx emissions by 85%, and to almost completely eliminate SOand particulate matter pollution.  

Is LNG shipping’s only viable option?

LNG might be leading the charge towards cleaner shipping, but it’s not the only solution on the table. Another potential is using advanced sail technology to harness wind, which helps power large cargo ships. More than just an innovative way to upscale a centuries-old method of navigating the seas, it is one that could potentially be retrofitted to cargo ships and significantly reduce emissions.

Drax is currently taking part in a study with the Smart Green Shipping Alliance, Danish dry bulk cargo transporter Ultrabulk and Humphreys Yacht Design, to assess the possibility of retrofitting innovative sail technology onto one of its ships for importing biomass.

Manufacturers are also looking at battery power as a route to lowering emissions. Last year, boats using battery-fitted technology similar to that used by plug-in cars were developed for use in Norway, Belgium and the Netherlands, while Dutch company Port-Liner are currently building two giant all-electric barges – dubbed ‘Tesla ships’ – that will be powered by battery packs and can carry up to 280 containers.

Then there are projects exploring the use of ammonia (which can be produced from air and water using renewable electricity), and hydrogen fuel cell technology. In short, there are many options on the table, but few that can be implemented quickly, and at scale – two things which are needed by the industry. Judged by these criteria, LNG remains the frontrunner.

There are currently just 125 ships worldwide using LNG, but these numbers are expected to increase by between 400 and 600 by 2020. Given that the world fleet boasts more than 60,000 commercial ships, this remains a drop in the ocean, but with the right support it could be the start of a large scale move towards cleaner waterways.

Drax: A rail history

Railways in Great Britain today are often seen as unreliable or chaotic, yet they remain a vital part of the lives of the population and the economy of the country.

When rail transport first arrived in earnest in the 19th century, it suddenly allowed goods from around the world, as well as people, to quickly cross the country. It reshaped perceptions of the country’s geography, unlocked the population and accelerated industries.

Over time, however, the role of the railways has diminished, owing largely to the massive rise in car ownership and the shifting of freight onto the road. But that is not to say it has completely lost its importance.

With 6,000 trains passing through Drax Power Station every year, rail is still integral to Drax and the region around it. In fact, since the very first introduction of the railways to the region it has played a major part in shaping the landscape.

A village with two stations

Before the construction of the power station or nationalisation of the railways, Drax village was well-connected, with two different railway lines running through it: the North Eastern Railway (NER) Selby to Goole line, and the Hull and Barnsley Railway’s Doncaster to Hull line.

Each of these lines ran through a different station with NER calling at Drax Hales Station while Hull and Barnsley called at Drax Abbey Station. But, following nationalisation and British Rail’s modernisation plans, Drax Abbey Station, which had closed to passengers in 1931, closed to goods traffic in 1959. Drax Hales Station followed suit in 1964 when it was closed as part of what became known as the Beeching Axe.

“British Rail chairman Richard Beeching famously carried out a review of Britain’s railways in the 60s and as a result closed vast quantities of – what he considered – uneconomical lines,” explains Andrew Christian, FGD & By-products Section Head at Drax Power Station and expert on the area’s history. “At that time oil was cheap, people were increasingly using cars and motorways were being constructed. Nobody really foresaw the rail demand that would be needed in the future to serve the power station.”

Daleks on a merry-go-round

In the 1960s and 70s, with the planning and construction of Drax Power Station underway, there was a new need for railways in bringing coal from the new Selby coalfield. This resulted in the reopening of a closed part of the Hull and Barnsley line for four miles from a reinstated junction at Hensall. Known as Hensall Junction it was renamed Drax Power Station Branch Junction and later shorted to Drax Branch Junction.

A rail system known as a ‘MGR loop’ was installed on the power station grounds, which allows trains to loop around the station and deposit coal – today also wood pellets – without stopping.

The ‘merry-go-round’ trains as they are known, were originally made up of 40, four-wheeled merry-go-round (MGR) hopper wagons. These were much smaller than the wagons that carry biomass from ports to power stations today, and more than 11,000 MGRs where built to serve coal power stations around Great Britain.

Photo by Andrew Brade, Railway Engineer at Drax Power Station

The open-topped wagons were each capable of carrying 33 tonnes of pulverised coal, which was automatically released thanks to a piece of machinery alongside the track colloquially known as ‘Daleks’ thanks to their resemblance to the Dr Who villain.

But as the power station began to change and evolved to fit the modern world, so too did the railway serving it.

Rail at Drax beyond coal

The original Drax rail loop was a single track, with three coal unloading points. By 1993 there was 14.5 km of track with 27 sets of points and crossings allowing trains to switch rails, thanks to the double tracked loop and extra tracks laid to serve traffic taking limestone in and gypsum out from the power station. This was further expanded with the introduction of biomass and a new double track and unloading facility in 2013.

The biomass trains are specially designed to keep compressed wood pellets dry and they are much longer than their MGR predecessors. At 18.2 meters long, their capacity is 30% greater than a coal wagon. It means the 23-wagon trains bringing biomass to the power stations from Tyne, Hull, Immingham and Liverpool’s ports are a quarter of a mile long.

It might be a far cry from the heyday in which the railways crisscrossed the region, but they remain a vital part of the area. And while the area’s original lines are now 50 years dormant, their remnants are still visible in the lasting impact they’ve left on the surrounding landscape.

Many of the embankments and bridges found in and around Drax stem from those first railway lines, while much of the A645 road that was constructed in the early 1990s runs along the track bed of NER’s route to Goole.

Photos by Andrew Brade, Railway Engineer at Drax Power Station

The trains might not stop in Drax Village anymore, but they remain a vital part of the landscape, and how it’s powered.

Northern Powerhouse Minister Jake Berry was in Yorkshire on 5 July 2018 to unveil the first Drax freight wagons with ‘Northern Powerhouse’ branding to deliver biomass to the power station. Read more.

The Northern Powerhouse’s missing link

On 1 February 1970, a train pulled out of Skipton station and began a journey through the Pennines to the Lancashire town of Colne. Having run since October 1848 through the towns and villages of Elslack, Thornton, Earby and Foulridge, this railway line had been in operation through both World Wars as well as the transition from steam to diesel.

But this journey was to be its last. As part of a cost cutting drive within the British Railways network, the Skipton-Colne link was shutting down.

Today, however, the North’s need for freight capacity is growing and this short 12-mile stretch of railway that meanders through the Pennines could soon be reopened.

The disused Skipton-Colne line

Campaigns such as the Skipton and East Lancashire Rail Action Partnership (SELRAP), with the support of businesses like Drax, are calling for the return of the line. Not only because of the history of the railway, but because it could play a crucial part in the future of transport in the North.

Reshaping British railways

In the 122 years between the Skipton-Colne line’s opening and its closure, the UK saw serious change. The rise of cars after the end of post-war petrol rationing made roads more important than railways and by 1961 British Railways was in a poor condition, losing money at a rate of £300,000 a day. Something needed to change.

The government looked to Richard Beeching, chairman of BR, who published a controversial 1963 report, ‘The Reshaping of British Railways’, which recommended closing 6,000 miles of the country’s 18,000 miles of railway lines – mostly in rural and industrial areas.

A train at Earby station on 1 February 1970, the last day of service on the Skipton-Colne line.

The Skipton-Colne line managed to avoid this first wave of closures, but with annual losses reported to be as high as £110,000 in 1968, its end was inevitable. On that February morning in 1970, photographers and onlookers gathered at the station to watch as the packed final train pulled out of the station on its last ever journey.

Now, almost 50 years after closing, the country has gone through further changes and it’s time once again to re-evaluate its transport network.

Investment in the Northern Powerhouse

The opportunity to reopen the rail line follows the government’s plan to invest £70 billion into road and rail infrastructure in the North over the next 30 years with the aim of boosting the economy by £100 billion and creating 850,000 jobs.

A key goal of this investment would be shifting freight services from roads to rail. According to Transport for the North, freight growth on the railway in the north is predicted to increase by 2-3 million tonnes by 2050. Road freight, on the other hand, is set to grow by 20-30 million tonnes on the M62 alone.

Graham Backhouse, Drax’s head of supply chain and logistics, highlights the urgency of the need for greater rail freight capacity:

“That growth means another truck joining the M62 every second, 24-hours a day, seven days a week. That is not sustainable.”

Thanks to its location, the Skipton-Colne line is strategically placed to play a major role in transforming the North’s transport by alleviating some of this pressure from the roads.

It could also help better connect cities like Blackburn and Burnley to hubs such as Leeds and Manchester, increasing access to jobs and higher education institutions. Consultancy firm JMP suggest that over 60 years the line’s opening could return £48-£138m of employment benefits to the region.

How 12 miles can save eight hours

Drax’s supply chain offers a further example of how transformative the Skipton-Colne line could be for businesses in the region.

Today, renewable wood pellets imported from the Southern US and Canada arrive at the port of Liverpool and are transported to Drax Power Station in Selby via an 11-hour rail journey. With access to the Skipton-Colne line, this journey could be as short as three hours.

This is because trains currently make a steep uphill climb between Manchester and Huddersfield, which – when carrying more than 1,600 tonnes of biomass – limits their speed to an average of 14 mph, well below the 60 mph they’re designed to run at when fully loaded.

With the Skipton-Colne line open to both freight and passenger trains, biomass wagons would be able to make this journey while avoiding inclines and run at full speed, something which, in the long run, will save more than just time.

“If we make our supply chain more efficient, of which reducing the cost of running a train across the country is one part, we can move towards a position where we can operate without government subsidies,” says Backhouse.

But there is a lot of work that needs to happen before this becomes reality. SELRAP forecasts the new line could be up and running along the old route by the mid 2020s, with five years of engineering preparation, public consultations and statutory approvals, followed by two years of construction work. The Department of Transport has recently started a project looking at the feasibility of the line, which should be completed by the end of 2018.

The total costs of the project would come in at over £100 million and while these short-term costs are not insignificant, the long-term effect on the businesses, industries and people of the area could be far greater.

Drax Biomass invests in greenhouse gas efficiencies

close-up of truck raising and lowering

We have increased the capacity at Drax Biomass Amite and Morehouse pellet plants to increase capacity and made them more greenhouse gas (GHG) efficient. Central to the projects was the addition of storage silos and handling equipment to allow increased use of dry shavings and other mill residuals. The developments included the addition of an extra truck dump at each facility to allow delivery of increased volumes of these feedstocks.

Drax biomass pellet trucks

Use of mill residuals and dry shavings reduces the energy required to make a pellet, as such material does not need to be de-barked, chipped and re-sized in the same way as roundwood. Some of the material has a low moisture content and is therefore able to enter the process after the dryer, which effectively increases the capacity of each plant. This drives down the average GHG emission per tonne of pellets produced. A key measure of this is the KWh of electricity per tonne of pellets, and we saw this reduce by about 10% in the final months of the year compared with the start of the year, with further savings anticipated.

LaSalle BioEnergy in Louisiana

At LaSalle, a significant amount of our investment is going into allowing pellets to be transported to the port by rail, rather than truck. For the 250 km trip to Baton Rouge, a significant carbon saving compared to trucks will be achieved when LaSalle reaches its capacity of 450,000 tonnes per year. Moving pellets by rail should start in the next year.

5 incredible numbers from the world’s largest biomass port

Since its origins the Port of Immingham has held close links with the UK’s rail and energy networks.

It was the Humber Commercial Railway and Dock company, along with the Great Central Railway, that first established the dock, completing it in 1912 to serve its primary purpose of exporting the most important fuel of the time: coal.

Today, Immingham is the UK’s largest port by tonnage, and while these transport connections endure, they’ve changed with the times. The port is now connected to modern rail infrastructure and helps run a renewable energy system.

Immingham is one of a number of UK ports that receives shipments of wood pellets which are used to generate renewable electricity at Drax Power Station in Yorkshire. With 20,000 tonnes of wood pellets arriving at Drax every day, here are the numbers that tell the story of how the port of Immingham keeps more biomass coming in than any other in the world:

£135 million revamping for renewables

The port began to get serious about renewable energy in 2013 when an investment of around £135m kick-started the creation of the Immingham Renewable Fuels Terminal – the largest biomass handling facility in the world.

Developed by the Associated British Ports as part of a 15-year deal with Drax, the revamp of the former coal port saw an update of its unloading, storage, rail and road facilities to make it biomass-ready.

Getting those 60,000 tonnes of biomass pellets from ship to train to Drax requires tight supply chain systems designed especially for this task.

2,300 tonnes of biomass unloaded every hour

A key component of Immingham is its continuous ship unloaders. Replacing the port’s grab cranes in 2013, these two structures use a combination of suction and an Archimedes screw to discharge 2,300 tonnes of biomass an hour from docking ships.

The continuous unloaders are bespoke for Immingham and designed to keep operating at a constant rate as the Humber’s tide rises and falls. Biomass is drawn up through the unloaders to a conveyer that then takes it all the way from the jetty to one of the port’s eight silos.

120 Olympic-sized swimming pools of storage

Unlike coal, which can be stored in the open air, biomass must be kept dry. Immingham stores wood pellets in eight silos, each capable of holding 25,000 tonnes of biomass.

With the port doubling its storage space from four silos in early 2016, the site’s total capacity now comes in at 336,000m3 – the equivalent of more than 120 Olympic-sized swimming pools.

Here the biomass can be stored for any time between a couple of days and a couple of months, depending on Drax’s demand.

72 trains heading to Britain’s biggest power station every week

The next leg of the journey for the wood pellets sees them moved along the conveyer to board Drax’s specifically designed trains.

Immingham’s rail facilities and Drax’s train wagons were developed to automate the loading process for maximum efficiency. Trains slow down to half a mile per hour as they enter the loading bay where sensors and magnets open the hatch doors of the wagons and close them when they’re full.

The automation of this process allows a 25-wagon train to be filled in just 37 minutes. In total, 12 trains can pass through each day, meaning the port can send 72 trains to Drax every week.

With each hopper’s full load at 71.6 tonnes of compressed wood pellets, each train can carry between 1,700 and 1,800 tonnes. It takes the total biomass reaching the power station from Immingham to a maximum of 130,000 tonnes each week.

£400 million added to the local economy

Drax’s contribution to the Yorkshire and Humber region includes 3,650 jobs and a £419.2 million economic impact.

This is primarily the result of the impact made by Drax Power Station to the region, however, its support of other businesses along its supply chains means its economic contribution is felt far beyond its Selby site.

In 2016, Drax indirectly supported 1,800 jobs in Yorkshire and the Humber region at facilities such as Immingham. Its indirect economic contribution came to £117 million, as the region’s biomass industry became increasingly important.

Find out about another major UK port that has been transformed thanks to renewable energy. How does biomass get shipped to the UK? Read the story of one of the US ports sending wood pellets to UK shores.

How do you keep a 1.2 tonne steel ball in prime condition?

There are 600 giant balls at Drax Power Station. Each one weighs 1.2 tonnes – roughly the same as a saloon car – and is designed for one simple, but very specific, purpose: to pulverise.

Every day thousands of tonnes of biomass and coal are delivered to the power station to fuel its generators. But before this fuel can be combusted, it must be ground into a powder in pulverising mills so it burns quicker and more efficiently. It’s the giant balls that do the grinding.

And although these balls may be incredibly durable, the constant smashing, crushing and pulverising they go through on a daily basis can take its toll. Maintaining the 600 balls across the power station’s 60 mills is a vital part of keeping the plant running as effectively as possible.

Surviving the pulveriser

Each of the six generating units at Drax (three biomass and three coal) has up to 10 mills that feed it fuel, all of which operate at extreme conditions. Inside each one, 10 metal balls rotate 37 times a minute at roughly 3 mph, exerting 80 tonnes of pressure, crushing all fuel in its path.

Air is then blasted in at 190 degrees Celsius to dry the crushed fuel and blow it into the boiler at a rate of 40 tonnes per hour. To survive these extremities, the balls must be tough.

Drax works with a local foundry in Scunthorpe, Lincolnshire to manufacture them. First, they are cast as hollow orbs of nickel steel or chrome iron and then smoothed to within one millimetre of being perfectly spherical.

After 8,000 hours of use, engineers check how rapidly they’re wearing down by measuring their thickness using ultrasound equipment and, if deemed to be too thin (which usually occurs after about 50,000 hours of use), replace them.

For this, they must first remove the top of the mill – including the grinding top ring – and then individually lift out and replace each massive ball. Those that are removed are typically shipped back to Scunthorpe to be recycled.

Transforming for a decarbonised future

When Drax Power Station was first built in the 1970s, the mills were designed to only crush coal, but since it was upgraded to run primarily on biomass, in the form of sustainable wood pellets, they have been adapted to work with the new fuel.

For the most part, this requires only minor changes – the primary difference is that coal is harder to fully pulverise. Coal typically does not get entirely ground down in the first cycle, so a classifier is needed in the mill to separate the heavier particles and recirculate them for further grinding.

The process of switching one mill from biomass to coal takes about seven days and nights. This work was carried out on Unit 4’s mills ahead of this winter, following biomass trials in the spring and summer of 2017. Now that the decision has been made to permanently upgrade that fourth power generation unit, converting one of its 10 mills from coal to biomass later in 2018 will take about twice as long.

Using the same essential equipment and process for both fuels helps to quicken the pace of decarbonisation at Drax Power Station as the UK moves to end the production of unabated coal-fired electricity by 2025. Come seven years from now, one thing will remain consistent at the huge site near Selby, North Yorkshire: the giant pulveriser mills will continue their tireless, heavy-duty work.

Understanding the pounds behind the power

Editor’s note: On 21st September 2017 the Board announced that Will Gardiner would replace Dorothy Thompson as Chief Executive, Drax Group as of 1st January 2018. Read the announcement to the London Stock Exchange. This story was written by Will two months prior to that announcement and remains unedited below.

The UK electricity market used to be simpler. Coal, gas and nuclear plants generated energy and fed power into the National Grid. Retail companies then delivered that power to homes and businesses across the country thanks to regional distribution network operators. Today, it’s not as simple. The energy system of Great Britain has grown more complex – it needed to.

The push to lower carbon emissions led to the introduction of an array of different power generation technologies and fuels to the energy mix. These all generate power in different ways, at different times and in different conditions. Added to this are government schemes that have changed how this is all funded. In short, our electricity market is now more complex.

Drax Group has transformed itself to align with this new system. It is now an energy company with complementary operations across its supply chain – sourcing fuel, generating 17% of Great Britain’s renewable power and then selling much of that electricity directly to business customers in the retail market. This has fundamentally changed both how we do business and the financial mechanisms behind the business.

Where are we now?

Drax’s financial and operating strategies are very much inter-linked. Shifting how we generate energy changes how we generate revenue. The company is structured according to a set of distinct business segments, each of which is treated in a slightly different way.

The generation business

Drax has adapted its business model to the UK government’s regulatory framework, which through successive administrations has broadly promoted investment in renewable and low carbon power generation. Three of our six electricity generation units – accounting for 68% of our output in the first half of 2017 – have been upgraded from coal to produce renewable electricity from sustainable compressed wood pellets. These units are a core part of Britain’s renewable energy mix. Guaranteed income from the third unit conversion has given us a significantly higher degree of earnings visibility and reduced our exposure to commodity prices.

H1, 2017: 10.7 TWh total generation; 7.3 TWh biomass generation

Our coal generation units no longer provide 24/7 baseload electricity. This means we primarily use our coal generation as a support system. When the grid needs it we can ramp up and down coal generation responding to demand and ancillary service needs. Our renewable generation units do this too. Ultimately, however, our long-term goal is to convert the remaining coal units – either to renewables or to gas. Our Research and Innovation team is currently looking into how we might be able to do this, but early indications show that coal-to-gas conversion could be an attractive option for delivering flexible and reliable generation capacity for the UK.

Drax Power is doing well and generated £137m of EBITDA in the first half of this year, a £51m increase compared to the first half of 2016.

We are confident about the projected growth of our power generation business to £300 million EBITDA by 2025. That plan is aided by our move into rapid response gas – a technology that can meet urgent needs of a power system that includes an increasing amount of weather-dependent renewables. Two of the four rapid response gas projects we’re developing are ready to bid for 15-year capacity market contracts this coming February. They are designed to start up from cold faster than coal and combined cycle gas turbine (CCGT) units. These small-yet-powerful plants will respond to short-term power market price signals and be capable of providing other, ancillary services to further enhance security of supply.

These projects should add an attractive additional source of earnings to our generation business. They also will have attractive characteristics, as a significant element of their earnings will come from the capacity market – guaranteed government income for 15 years.

The retail business

We directly serve the retail market through Haven Power, which supplies renewable electricity primarily to industrial and commercial customers. Last week we announced that Haven Power was able to break-even six months ahead of schedule. Retail is an area we’re growing, and in February 2017 we acquired Opus Energy, the largest non-domestic UK energy company by meters installed outside the Big Six. This has had a marked effect – today we’re the largest challenger B2B energy retailer in the UK.

There is a healthy and regular annuity coming in through the existing retail business, and we believe this can generate £80 million of EBITDA by 2025, which, together with our growing biomass supply business, will make up a third of our earnings. We demonstrated good progress in the first half of the year, earning £11m of EBITDA.

The biomass business

Our two operational wood pellet manufacturing plants in Louisiana and Mississippi are progressing well. They are both still ramping up to full production and have seen marked improvements in pellet quality and production.

We are looking to grow our US business and as part of this we’ll need to build on the recent addition of LaSalle BioEnergy with further acquisitions. Expansion will grow our capacity for the self-supply of pellets from 15% to 30% of Drax Power Station’s requirements, adding an additional one million tonnes of production.

In the second half of 2017, we expect the profitability of Drax Biomass to increase. LaSalle will be commissioned in the first half of 2018 and reach capacity in 2019.

What’s next?

The energy landscape continues to change and we’ll need to change with it. Phasing out coal entirely is priority number one. For this we’ll continue to look at options. How and when we can convert more units to sustainable biomass depends on trials that we are conducting at Drax Power Station during 2017-18. The right government support would also make further conversions cost effective.

We also recognise that it’s important to look at alternative possibilities for our remaining coal units. This is why we are seeking planning permission to convert one or more of our 645 MW (megawatt) coal units to 1,300 MW of gas. Such an upgrade would be at a discount to a new-build, combined cycle gas turbine (CCGT) power station of equivalent capacity. And that’s simply because we would use much of the existing infrastructure and equipment.

Another major prospect is in the technology space and so we’re continuing to invest in research and innovation. Batteries and storage are a huge opportunity for us – both in how they could benefit our retail customers, and how they could provide solutions for large-scale centralised energy systems. In short, it’s an area with huge potential. We welcome the government’s recent initiatives designed to stimulate the development of battery technology, as well as encourage the use of electric vehicles.

Drax has gone through a period of considerable change and that will continue as we meet the UK’s low-carbon energy demands. We are improving the quality of our earnings, reducing our exposure to commodities, and positioning to take advantage of future opportunities. As we told investors in June, if we deliver on these plans, we can expect >£425 million of EBITDA in 2025.

A sustainable partner in Brazil

Brazil has one of the most famously diverse ecologies in the world. Given its incredible size, this means each corner of the country is markedly different to one another.

The state of Rio Grande do Sul, located at the southern tip of the country, is a region characterised by ‘pampas’ grassland – a far cry from the dense rainforest found nearly 2,500 km away to the north.

It is also home to a company supplying wood fibre used to make sustainable biomass wood pellets. Although TANAC may be a relatively new entrant to the wood pellet industry, it has a long legacy of responsible commercial forestry.

A century of sustainable forestry

Acacia mearnsii trees were first planted in Rio Grande do Sul more than a century ago. A fast-growing species native to Australia, it was cultivated in Brazil for its bark, which is used in the tanning process of leather production as well as for the use in water and wastewater treatment and wood adhesives manufacturing. TANAC was established in the area in 1948 to do just this – grow acacia trees, harvest the bark and produce tanning products. In fact, the name TANAC is an acronym for ‘TANnin of Acacia’.

Young growth in an Acacia nursery

The wood fibre left over was traditionally thought of as a by-product and used for firewood and charcoal manufacturing, but with the increasing demand of the pulp and paper industry in the mid-90s, the company invested in a wood chip mill and began exporting pulp chips. Over the decade that followed, technology began to replace demand for newsprint and other wood products in North America and Europe. TANAC needed to maintain stable routes to market and so another use for this fibre emerged: creating compressed wood pellets to satisfy rising demand for bioenergy. Some of these pellets are now set to be used at Drax Power Station in Yorkshire.

The long-term agreement announced in 2014 to supply these pellets means stability and security for the business in Rio Grande do Sul. “TANAC’s $60m investment has made this agreement possible,” commented Otavio Decusati, Chief Executive of TANAC. “Partnering with Drax strengthens our operations – it creates jobs, directly and indirectly, within the forestry supply chain, forest management and industrial operations sectors.” It provides Drax with a varied supply from a highly credible and sustainable partner for the next 10 years.

TANAC wood pellet mill

Sustainability first

Brazil has a rigorous process for maintaining its environmentally valuable and ecologically diverse areas. For instance, in Rio Grande do Sul, the State Council for the Environment (CONSEMA) requires forest owners to obtain a forest licence and identify which areas are suitable to be used for plantations (also known as working forests), and which will be natural reserves and protected bio-diverse areas that remain untouched by commercial operations.

TANAC has achieved ISO certifications for quality and environmental management systems, and its plantations are certified by the FSC® Forest Management, so preserved areas of Brazilian natural heritage stay that way. “Ever since TANAC was founded in the 40s through to our FSC® certification in 2004 and beyond, we work to ensure that there is a balance between our use of natural resources and the preservation of the environment we live in,” said Decusati.

Wild cats (Leopardus guttulus) in an Acacia plantation

But what practical measures do these regulations require of foresters? They legally require forest owners to turn over 20% of their total holdings to natural reserve areas – which should include any areas identified as sensitive or natural forest areas. Nor can these just be lone islands of biodiversity – the regulations require there are habitat corridors linking together reserve areas, allowing wildlife to move from one area to another.

On top of this, TANAC works with the World Wildlife Fund (WWF) in a long-term project called the ‘Forest management, conservation and restoration in the Atlantic Rainforest biome’. The project aims to conserve local biodiversity and promote sustainable use of natural rainforest resources.

As part of its deal with Drax, the company will bolster these sustainability credentials. It will undergo an independent carbon stock assessment every two years to ensure carbon stocks are being properly maintained.

It’s been nearly seven decades since TANAC first set up shop in Brazil and much has changed. But while supplying renewable fuel to the UK may be a far cry from the leather industry, it still relies on the same core product: responsibly-grown forests.

How sustainable biomass crosses the Atlantic to power the nation

In the UK, we’re so accustomed to using electricity we rarely think of the journey it takes from power station to plug.

In fact, electricity must travel across a network of cables, wires and substations before it makes it from the power stations generating it to the homes and businesses using it. At Drax Power Station, which supplies 16% of Great Britain’s renewable power, there’s another journey that takes place even before the electricity leaves the power station.

This journey – the journey of more than half of the compressed wood pellet fuel Drax uses to generate electricity – has its origins in the expanse of forestland in the southern USA.

From forest to fuel

The journey starts in the huge, working forests of the southern states of the USA where low value wood – such as the thinnings cleared as part of a forests’ growing cycle – is collected in a responsible and sustainable way to make high density wood pellets, which Drax Power Station uses to produce more than 60% of its electricity.

Drax Group’s own pellet manufacturer, Drax Biomass, produces around 15% of the power station’s renewable fuel. After pelletisation locally at its Amite and Morehouse facilities, located in Louisiana and Mississippi respectively, the biomass is transported to Drax Transit at the Port of Greater Baton Rouge, on the Mississippi River. From Morehouse, trains made up of closed-top grain cars, each capable of carrying 120 tonnes, transport the pellets 221 miles to Baton Rouge. At Amite, just 60 miles from Baton Rouge, fuel-efficient trucks carry 25-tonne loads between plant and port.

Once at the port, the truck and train cargoes are unloaded into one of two biomass storage domes – each holding 40,000 tonnes of biomass – before being loaded into the ships for their transatlantic journey.

A boat arrives at Peel Ports in Liverpool

From port to port

Drax uses a range of ships to carry the pellets on their 8,000-mile journey to the UK, ranging from big ‘Coastal’ ships, capable of hauling 20,000 tonnes, to truly massive Panamax ships, more than a quarter of a kilometre in length and capable of carrying up to 80,000 tonnes.

The ships leave the port and spend 24 hours travelling the 200 miles down the Mississippi River into the Gulf of Mexico, around Florida, and into the Atlantic. From here, it’s a 19-day voyage to reach ports in the UK. To put that into perspective, it took Columbus more than two months to make his first trip across the Atlantic.

The ships pull into ports in Tyne, Hull, Immingham and Liverpool, where they are unloaded. At the bespoke biomass port facility at Peel Ports in Liverpool an Archimedean screw removes the pellets from the ship’s holds and transports them onto a conveyer belt, which loads them onto trains. These four ports can process up to 12 million tonnes of biomass every year, combined.

From port to power station

Like the stateside journey, Drax uses trains to carry its cargo from port to power plant. The difference on the UK side, however, is that the UK trains were designed specifically to carry biomass wood pellets. Clever design and engineering was used to maximise the space inside each carriage and ensure the trains carry large loads despite UK rail restrictions.

These trains carry the pellets across the country (and even over the Pennines for trains coming from Liverpool) to Drax Power Station in Selby, North Yorkshire. Roughly 14 trains arrive at the plant every day and collectively unload about 20,000 tonnes of pellets every day, from Monday to Saturday. A system of conveyor belts carry these pellets to one of Drax’s four giant biomass storage domes, each capable of housing about 80,000 tonnes of pellets.

Then, when needed, the conveyor system takes the pellets on their final journey: into the furnace. The pellets are combusted, which boils water to create steam, which turns a turbine connected to a generator, which then feeds electricity to the national grid. The electricity travels across miles of cables, and wires, through substations and transformers, and finally into your power socket.

An engineer looking into a Drax furnace

Long journey, low emissions

Despite the number of miles travelled, the journey of biomass is tracked and managed to ensure the Drax Power Station supply chain is as low-carbon as possible. The result is that, even with all supply chain emissions considered, the power generated has a carbon emissions profile that is more than 80% lower than coal.

It might be one of the most impressive supply chains involved in powering this island – but it’s not the only one to travel thousands of miles. The journey of biomass to England joins liquefied natural gas (LNG) shipped from the Middle East, coal from Colombia and solar panels manufactured in China – imports that ensure we have readily available access to power on our shores.