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How many homes can we power with renewables?

Terraced houses at night time on portland dorset

More of Britain’s electricity is coming from renewables than ever before. New offshore wind farms, solar capacity hitting double figures and the reliability of biomass are having a marked effect on the country’s power.

Our electricity make up is more diverse than ever. More than this, it is cleaner. During the first three months of 2017, emissions from power generation were 10% lower than the same period last year and 33% lower than the first quarter of 2015.

And while this is a huge and necessary step in the UK’s efforts towards slowing global warming, it would mean little if renewables weren’t also keeping our lights on. That’s exactly what they are doing – powering businesses, industries and homes across the country. But how many, exactly?

The scale of renewables

In 2015 the total electricity consumption of the UK was 303 TWh. To put that into perspective, that’s roughly enough power to boil 121.1 billion kettles. A quarter of the 360 TWh of electricity generated that year  came from renewables – 84 TWh – a massive 29% increase over 2014. Of that figure, Drax’s biomass units contributed 11.5 TWh, approximately 3% of that year’s total power generation.

So, renewables are big, but how big?

Panoramic photo of modern house with outdoor and indoor lighting, at night

According to the 2011 Census there are 26.4 million households in the UK. Ofgem, the energy regulator, says the average UK household uses roughly 3.1 MWh of electricity a year (the average US household uses approximately 10.8 MWh).

If we were to hypothesise that all the renewable power generated in 2015 had been consumed by UK households, there would be enough to power every single one. And there’d be enough left over to power 600,000 more.

Using just the power generated thanks to sustainably sourced compressed wood pellets at Drax Power Station would be enough to satisfy the equivalent of 4.1 million homes – nearly twice the number of households in Scotland or 800,000 more homes than in the whole of London. 15% of all UK homes could have been powered by just half that one station in Selby, North Yorkshire.

Finding the right mix for the future

Electricity is used to power more than just homes. It powers businesses, transport and infrastructure – almost all parts of our lives are fuelled by electricity. While there may be the hypothetical equivalent to power every single household in the UK with renewables (with room to spare), the reality is there is a far larger nationwide demand that needs to be fulfilled. And this means we can’t rely on renewables alone. Instead, what’s required is an energy mix that also includes other low carbon sources of electricity – backed up by a new fleet of gas power stations and storage that can respond rapidly to changes in demand.

While we’re not yet in a position where we can power all homes all the time using renewables, that day could well be coming. A new report from the International Renewable Energy Agency (IREA) suggests a mix of renewable technologies including biomass and bioenergy with carbon capture and storage (BECCS) could meet the majority of global energy demand across all sectors of the world economy by 2050 – while helping to keep the rise in global temperatures to under two degrees celsius above 1990 levels.

Annual report and accounts 2016: Smart Energy Solutions – Q&A

View the Drax Group plc annual report and accounts

Q. Do you think performance got better or worse in 2016?

A. Financially, EBITDA was in line with our guidance, although below 2015. This principally reflects very challenging commodity markets and the removal of the Climate Change Levy exemption.

We were able to partly offset the impact of these factors with a focus on flexible system support, in the prompt and balancing markets, ancillary services and improving retail profitability, all of which are important parts of our strategy to develop broader, non-commodity exposed earnings.

Operationally, 2016 was another good year across our business, but particularly
in generation where the team completed a significant outage programme and on the regulatory front the European Commission’s approval of the CfD meant we could complete the final stages of the upgrade to our third biomass unit.

Q. What were the most significant changes for the Group in 2016?

A. The most important change was the new Group strategy, which gives us all a very clear direction for the future and will see Drax become a broader business across our markets – pellet supply, generation and retail. The acquisition of Opus Energy will strengthen our retail offer, and our plans to build four rapid response gas power stations will plug the gaps at times of system stress.

The new Group strategy is underpinned by new people and IT strategies which are crucial to its successful delivery.

Haven Power has also seen significant change with the arrival of CEO Jonathan Kini. He, along with his team have been working to ensure we are well placed to continue growing and to boost our retail offer with the recent acquisition of Opus.

Q. How do you think 2017 will be different to 2016?

A. The focus will be on continuing to deliver good performance right across the Group, but there will also be changes as we work closely with the Opus team to ensure we create the best possible retail offer for the UK’s SMEs. Drax Power will be progressing the OCGT gas projects, and it will be an exciting year for Drax Biomass as they look to secure acquisitions of pellet mills and opportunities to export compressed word pellets to other markets. Everyone across the Group will see further evidence of the new strategy roll-out, particularly in the form of the people and IT strategies.

Q How does diversifying into gas fit with your aim to replace coal with renewable generation at Drax?

A. It complements it perfectly. The European Commission’s approval of the CfD enabled us to complete the upgrade of half the power station to run on compressed wood pellets in place of coal and in 2016, 65% of the electricity we generated at Drax was renewable.

The job is not yet done, and with the right conditions we will upgrade the remaining coal units. We can do this in just two to three years, when the conditions are right.

The planned gas power stations will not be run to produce baseload power, but as rapid response units to plug the gaps at times of system stress, for example when wind and solar fail to contribute what’s required. They will also be part of a solution that can accelerate the end of coal in the UK.

Q. Can you explain the acquisition of Opus? Wouldn’t it have made more sense to grow Haven?

A. We acquired Haven in 2009 when it was an SME focused business. Since then the business has grown significantly by principally focusing on the I&C market to provide a route to market for around half the electricity Drax Power produces, although it retains a relatively small SME presence.

Opus – like Haven – is a challenger business and brings with it 265,000 customer metered sites, largely SMEs. Opus also supplies gas, which for the first time will see us having the ability to provide a dual fuel offer, something that is vital for many SMEs.

Opus gives us immediate scale in the SME market and we think the complementary nature of the Haven and Opus models can provide a compelling challenger retail proposition for our customers.

Q. Have you got the right team and systems in place to ensure that Opus will join the group with minimal disruption?

A. Yes, Jonathan Kini, who leads our retail business has a great depth of experience in SME markets and integration. He has strengthened his team to ensure we have the expertise required to make this a very successful transition as Opus becomes a member of the Drax family.

However, I’m in no way complacent about the challenges, that’s why we developed a plan to embed Opus covering everything from IT to communications. It’s vital we get this right and that our new colleagues become part of delivering our new Group strategy and share in our values. Clearly I also want both Haven and Opus customers to continue experiencing high levels of service along with the benefits of a more comprehensive retail offer.

Q. How is Drax Power different to when you joined?

A. In many ways Drax is now a very different place to what it was when I joined Drax more than ten years ago. The fact that in 2016 65% of our output was renewable is something I’m very proud of, and right across the power station you can actually see the difference that using compressed wood pellets has made: huge storage domes, specially designed train wagons, and a visitor centre and guides explaining the latest chapter in the Drax story.

Essentially today the power station operates as two power stations: a reliable, flexible, renewable generator producing electricity for businesses and homes and a fossil fuel generator providing system support and security of supply.

Q. You have highlighted the role that Drax coal units can play in system support and ancillary services – what is this and why is it important?

A. Increasing levels of intermittent renewables and inflexible nuclear present the grid with a challenge, and for Drax, opportunities.

When the grid needs capacity our coal units have the flexibility to turn on and off, and ramp up and down responding to demand as weather and time of day determine the availability of wind and solar. It is already common place for Drax to “two-shift” the coal units; using them to provide flexible, responsive power, rather than baseload.

But it’s not just about generation – a well-functioning grid needs other services too. 2017 will see Drax seeking further opportunities to provide the electricity grid with this increasingly important system support.

Q. Did the result of the UK’s EU referendum have any impact on the business?

A. Our business model is largely unaffected by the decision to leave the EU. We will continue to generate and sell power in the UK. We purchase a significant amount of the fuel we require in foreign currency and our long-term hedging strategy – five years ahead – has protected us against any negative impacts of exchange rate fluctuations for the medium-term.

Q. Has the change in the UK Government resulted in any different signals being sent out to the renewables sector?

A. I think that still remains to be seen. We have to look at the huge changes that have happened in Government since the EU referendum as a potential opportunity for us as we continue to make the case for investment in further biomass upgrades.

What is clear is that the focus is still very much on affordable energy. In 2016, Imperial College London and the economic consultancy NERA published new research that we commissioned. It showed that when whole system costs are factored in biomass is the cheapest large scale renewable technology. If Government applied this method of support to future CfD auctions, consumers could benefit by up to £2.2 billion.

As we take forward our new strategy we will also be clearly communicating our plans for rapid response gas power stations and how the system support they will provide contributes to decarbonising the UK’s energy system.


Q. What are the latest plans to convert the remaining generating units that run on coal?

A. We have now delivered on our original strategy to upgrade three generating units to run on compressed wood pellets. However, we would like to do more, and have consistently said that with the right conditions we stand ready to convert further units.

The transformation we’ve been through has meant we’ve learnt a huge amount over the last few years, and there’s no doubt that for future upgrades we can carry them out quicker and more cost-effectively.

Q. Why do you think questions around the sustainability of biomass continue to be raised?

A. I think many companies involved in the sourcing and supply of sustainable products will face questions in this area. What we will do is continue to be open and honest about all aspects of how our business operates including sustainability. Much of that evidence can be seen in this annual report, from our own stringent sustainability policy, to how we comply with the UK Government’s sustainability legislation criteria.

However, we are never complacent and for example each new pellet supplier to Drax is fully and independently audited before a contract is signed and our existing suppliers are audited at least once every three years.

Q. Which other business roles do you have outside of Drax and how do they help the Group

A. I’m a non-executive director at the Eaton Corporation and also the Court of the Bank of England. I think it’s important to have roles outside the business, as long as they allow you to get the balance right and these do. So, clearly they should in no way be a distraction from the “day job”, but worth an investment of time that allows you to see how others operate and whether there are lessons that we can learn or best practice that we can adopt.

Q. What’s the feeling around the Board table?

A. I’d say it’s one of excitement at the opportunities our new Group strategy and acquisitions present for the future. While there’s obviously satisfaction that we’ve delivered on what we initially set out to do – upgrade three generating units to run on compressed wood pellets, there is certainly no feeling of “job done”.

In the months ahead the Board will rightly want to see clear and positive progress as we work to boost our retail offer through Opus Energy and develop our plans to build four rapid response gas power stations.

View the Drax Group plc annual report and accounts

The people behind the power

Drax Group may have been built with Drax Power Station at its core, but today it’s a set of integrated companies, helping to change the way energy is generated, supplied and used, to build a better future.

At the heart of each part of the business – from creating the fuel to power the station’s boilers to managing the supply of electricity, gas and renewable heating fuel to customers – is people.

Here we meet some of those people working behind the scenes.

Robert Gatlin, Operations Supervisor, Amite BioEnergy, Drax Biomass

robert_bw“I was a student in the Process Operations Technology programme at Southwest Mississippi Community College and Drax came to the school to recruit new grads. They were introducing a new technology I’d never heard of and it sparked my interest.

“The idea of using biomass to produce electricity on such a large scale was fascinating, so I joined Drax Biomass in 2014. I was unaware biomass was being used to produce electricity – it’s very exciting to be part of something this big and cutting edge.

“One of the most interesting things I’ve discovered working here is the way moisture affects nearly everything in the pelletising process. We really have to work diligently to ensure our moisture levels are where they need to be in every stage of producing a pellet.”

Rachel Grima, Sustainability Analyst, Drax Group

rachael_bw“I’ve always wanted to work in renewable energy and I studied life cycle analysis during my degree. I started looking for jobs in renewable energy, and as the biggest generator of renewable energy in the UK, Drax was an obvious choice!

“Today my job involves assessing and interpreting sustainability data for all the biomass we use. Our team uses this data to assess if a supplier meets our sustainability policy and regulation.

“I’d never looked very much at transport emissions, so I find it really interesting. You can move 30,000 tonnes of wood pellets in one ship, but it would take over 1,000 trucks to move that many, creating far more greenhouse gas emissions. Since joining the team, I’ve been really surprised to see how driving small efficiencies in a supply chain can create real savings in greenhouse gas emissions.”

Stephen Wilkinson, Turbine Maintenance Technician, Drax Power Station

Stephen Wilkinson, Turbine Maintenance Technician
I’ve always enjoyed building and fixing things. Given that my father and both grandfathers were in engineering – one of them even working at Drax during its construction – I had a strong drive to get into engineering. Living locally, it seemed the biggest and best place to work.

“I’m a Turbine Maintenance Technician, so I act as the link between the turbine support group and the main station planning and maintenance teams. I start the day early by looking through the list of overnight defects, focusing on the turbine area. After this I’m out of the office having a look at the issues to determine whether the station maintenance team or the turbine support group will carry out the repair work. From this point on every day is different.

“The recent changes Drax has made to adapt to a rapidly changing energy market has affected most people at the station. For me, seeing the major turbine upgrades take place has been extremely interesting. I started as an apprentice and then as a fitter, working on the turbine outages, seeing these upgrades first-hand. This has moved on to the point where I have been lucky enough to visit a number of the turbine manufacturing facilities in the UK and Germany.”

Gemma Baker, SME Customer Service Delivery Manager, Haven Power 


“I joined Haven Power in July 2007 as a Customer Service Advisor. I’d never worked in the energy industry before and thought it sounded interesting – Haven caught my eye as it was a new company which excited me. Being part of and contributing to a growing company was right up my street!

“Now I’m responsible for delivering a consistent and valued account management service to our electricity customers across all the small- to medium enterprise (SME) segments. This includes everything from billing and cash collection, to renewals and query and complaint resolution. I’ve been at Haven for nine and a half years now!”

Sam French, Customer Service Administrator Apprentice, Opus Energy


“Before joining [Opus Energy] I didn’t know anything about the energy industry – now I know about different supplier competitors, how an electricity supply contract is agreed and registered, and how we actually apply for a supply. I’ve learnt so much about different aspects of the energy industry, too.

“I haven’t had that much involvement with the Drax Group yet, but I’ve enjoyed looking into the business. I’ve found it really interesting to learn how they’ve managed to transition from a non-renewable company to one that is now producing more renewable than fossil fuel power – which is amazing.”

Amy Carton, Sales and Marketing Executive, Billington Bioenergy


 “I’m responsible for all aspects of internal and external marketing and communications at Billington Bioenergy, a company which supplies wood pellets to commercial and domestic customers who use them to heat their homes or businesses.

“I try to be environmentally conscious and keep my carbon footprint as low as possible – renewable and sustainable heating comes into this. It’s wonderful to spend my days promoting the merits of renewable heating. It’s a relatively small industry in the UK in comparison to our European counterparts, but this makes what we do here in Billington Bioenergy quite unique.

“There was quite a bit of information to digest when I first started – for example, ENplus regulations, different types of pellets, how wood pellet boilers work… it was a big learning curve!”

Find out about careers and apprenticeships within Drax Group:

Retooling for a post-coal future

The energy system in Great Britain is dramatically changing. Where it was once an industry dominated by coal, a predictable but dirty fuel, now our power increasingly comes from renewables. This is a trend that will continue, forcing more coal off the system.

Drax has a role in this new future of renewable power. We have already converted half of our power station in North Yorkshire to run on renewable biomass, and now, to support the needs of a system increasingly dominated by intermittent renewables like solar and wind, we are developing plans to build four new state-of-the-art flexible power stations – two in England and two in Wales.

Each will be 299 MW in size and powered by gas. Two of them could be producing electricity by 2020. It’s the next step for us in helping change the way energy is generated for a better future.


Supporting a renewable energy mix

Wind and solar accounted for 15% of Britain’s electricity mix between July and September from an installed capacity that has increased six fold in just six years. Biomass generation at Drax rose from almost nothing to producing 20% the country’s renewable power in the first half of this year. Renewable energy has come on leaps and bounds this decade – perhaps more than anyone ever thought it would.

But as well as being much lower in carbon emissions, renewables like wind and solar operate very differently to the fuels the GB Grid was built on – they’re intermittent. They only work when the sun is shining and the wind is blowing. So when it suddenly becomes still or dark, we need alternatives that plug the gap, deliver power and boost security of supply.

Biomass is one part of how we can do this using lower carbon fuels. Compressed wood pellets (the biomass used at Drax) is a renewable fuel that can be used to generate baseload power that can also be dialled up and down to meet demand. Like coal, it can also provide the ancillary services the Grid needs to stay stable.

Unlike combined cycle gas turbine (CCGT) power plants, which currently supply roughly 40% of the UK’s power and take 1.5 hours to start up from cold, our new open cycle gas turbine (OCGT) plants are like big jet engines – generating electricity at full power in just 20 minutes from cold or 10 minutes from a warm standby. It’s an incredibly fast turnaround and it’s what the energy network needs.

And because it’s a lower carbon fuel than coal with higher flexibility it will support the UK’s decarbonisation targets – by enabling more wind and solar on the Grid. We plan to use OCGTs to plug the gaps that intermittency creates – essentially flicking the switch on and off at very short notice. We anticipate they would run for no more than 1,500 hours per year – only at times when the electricity system is under stress. Through supporting more intermittent renewables we also help to enable more coal off the system.

A better future for customers

This new future will not only mean changes for us, the generators, but for customers, too.

How energy is supplied and used is evolving, and this is something that Drax can support with the growing retail side of our business.

We’re a company with a wealth of expertise in renewable power and we can use this to help deliver electricity to business customers in a way that caters for today’s market. We’re already doing this with Haven Power, but now we’re extending this with the acquisition of Opus Energy. With this new company as part of Drax Group we will be able to grow our existing retail offering, providing more of the UK’s growing businesses and established industrial and corporates not only with electricity, but also with gas. Our retail offering will provide businesses with a route to sell the power they generate but do not need – plus expertise in how they can use energy more efficiently.


These are the first steps in a new chapter for Drax. There will be more research and development to come. In the future we’ll be looking at how we can extend our American compressed wood pellet supply business, Drax Biomass, and at the potential for power storage systems.

If we want to continue to be a truly modern energy company that delivers on our aim of changing the way energy is generated, supplied and used for a better future, we need to be able to adapt. It’s always been a part of Drax’s history and it will be a part of our future.

Should the carbon tax be scrapped? Definitely not

Coal field at Drax Power Station

Carbon emissions from electricity consumption in Britain are at their lowest level ever. Each unit of electricity produced now contains less than half the carbon it did four years ago. This pace of decarbonisation is ahead of expectations – it’s also entirely necessary.

Carbon dioxide (CO2) contributes to the warming of the planet and so limiting how much of it is released into the atmosphere is critical. Nowhere is this more important than in the power sector – one that has relied on carbon-intensive fossil fuels like coal for its lifetime.

The UK government has recently ramped up plans to end coal power generation by 2025, and since 2013, one of its methods for doing so has been an economic one: making organisations pay for every tonne of CO2 they release.

It makes carbon emissions an economic disincentive for businesses, but surprisingly, some of CO2’s biggest emitters fully support it – Drax included.

How do you put a price on carbon?

The EU was the first region to put such a scheme in place when, in 2005, it introduced the EU Emissions Trading System (EU ETS). Under this system, energy companies have to buy permits that allow them to emit CO2. But the price of those permits has historically been volatile – dropping as low as below £3 per tonne in 2014.

In 2013 the UK introduced the Carbon Price Floor (CPF), a means of bolstering the EU’s cost of carbon by setting a minimum price on emissions. Currently this is set at £18 per tonne, more than four times the value of an EU carbon permit.

More recently the CPF has become a point of contention as some industries claim it stifles progress and have called for it to be scrapped in the upcoming Autumn Statement.

This opposition has already caused blockers. Plans to raise the CPF to £30 per tonne by 2020 were halted by previous Chancellor George Osborne, who instead froze it at £18 until the end of the decade.
But this view isn’t universally shared. Drax, along with a number of other energy companies, including SSE and Calon Energy, recently wrote to the current Chancellor Philip Hammond to argue to keep the price in place until at least 2025.

In the letter we state the reason for our support plainly: we believe the Carbon Price Floor is central to the UK’s efforts to decarbonise its electricity system. In short, if we want a cleaner future, the CPF needs to remain in place.

Andu Koss Standing in front of turbines

Why price carbon?

Not only does a carbon tax disincentivise using CO2-heavy fuels and processes, it encourages investment in lower carbon and renewable energy sources by making them more cost effective relative to coal, diesel and fuel oil.

More than that, it places the decisions on how to reduce CO2 emissions into the hands of those making them. As long there is a societal cost to global warming, it makes sense to put a cost to the emissions that cause it.

In 2009 Drax began an upgrade of our power station to run on biomass. It was a decision to pursue decarbonisation on our own terms made by people with the knowledge of how best to achieve it. Today three of our six units are powered by compressed wood pellets, which has seen an 80% reduction in carbon emissions when compared to coal.

It’s also a significant revenue driver for the country. The levy is expected to raise £1 billion this year, while globally the World Bank estimates the value of implementing carbon pricing initiatives at a little under $50 billion dollars.

The revenue is significant, but so too are the impacts on emissions. Since 2012, the UK’s carbon emissions have fallen by over 4.5% a year and on May 5th, the country reached a milestone: the first time since 1881 the UK was powered without burning any coal.

This evidence sets out a clear argument. The CPF contributes to reducing carbon emissions, and for this reason it’s important it remains a part of the UK’s decarbonisation strategy. Scrapping it would be a grave error in the UK’s future energy plans and could limit our ability to meet the Paris Agreement targets.

2016 has already been an historic year for the electricity industry in Britain. But if the CPF is scrapped it will become a milestone year for different reasons. Rather than the year in which low-CO2 power generation took a step forward, it will be the year a decarbonised electricity future drifted further from our reach.

This is how you make a biomass wood pellet

Compressed wood pellets

Wood has been used as fuel for tens of thousands of years, but this wood – a compressed wood pellet – is different. It’s the size of a child’s crayon and weighs next to nothing, but when combined with many more it is a smart solution to generating cleaner electricity compared to coal.

Wood pellets like these are being used at Drax Power Station to generate electricity and power cities. Not only are they renewable and sustainable, but because they are compressed, dried and made from incredibly fine wood fibres, they’re also a very efficient fuel for power stations.

This is how a compressed wood pellet is made at the Drax Biomass Amite BioEnergy Pellet Plant in Mississippi.

The wood arrives to the yard

Wood arrives at the plant via truck and is sent to one of four places: the wood storage yard, the wood circle (where wood is primed for processing), the piles of sawdust and woodchip, or straight into processing.

Bark is removed and kept for fuel

Logs are fed into a debarker machine, which beats the logs together inside a large drum to remove the bark. The bark is put aside and used to fuel the woodchip dryer, used later in the process.

Thinned wood stems become small chips

The logs – low-value fibre from sustainably managed working forests – need to be cut down into even smaller pieces so they can then be shredded into the fine material needed for creating pellets. Inside the wood chipper multiple blades spin and cut the logs into chips roughly 10mm long and 3mm thick. The resulting chips are fed into the woodchip pile, ready for screening.

Chips are screened for quality and waste is removed

Chipped down wood can include waste elements like sand, remaining bark or stones that can affect pellet production. The chips are passed through a screener that removes the waste, leaving only ideal sized wood chips.

The biggest hairdryer you’ve ever seen

The wood chips need to have a moisture level of between 11.5% and 12% before they go into the pelleting process. Anything other than this and the quality of the resulting pellets could be compromised. The chips enter a large drum, which is blasted with hot air generated in a heater powered by bark collected from the debarker. The chips are moved through the drum by a large fan, ready for the hammer mill.

Wood pellet Hammer Mill

Small woodchips become even smaller woodchips

Inside the hammer mill there’s a spinning shaft mounted with a series of hammers. The wood chips are fed into the top of the drum and the spinning hammers chip and shred them down into a fine powdery substance that is used to create the pellets.

Putting the chips under pressure – a lot of pressure

The shredded woodchip powder is fed into the pellet mill. Inside, a rotating arm presses the powdered wood fibre through a grate featuring a number of small holes. The intense pressure heats up the wood fibre and helps it bind together as it passes through the holes in a metal ring dye, forming the compressed wood pellets.

Resting and cooling down

Fresh pellets from the mill are damp and hot, and need to rest and cool before transporting off site. They’re moved to large storage silos kept at low temperatures so the pellets can cool and harden, ready for shipping.

One of the biggest domes you’ve ever seen

This is the final stage before shipping. Specially designed and constructed storage domes are used to store the wood pellets after they are transported to the Mississippi River, Louisiana and before they make their way across the Atlantic to the UK.