Tag: Drax Power Station

[Carbon Capture Magazine article] Spiking Energy Demand

This story first appeared in Carbon Capture Magazine.

By Raj Swaminathan, Senior Vice President at Drax.

While there’s little debate that the greenhouse gas emissions that sit at the heart of our planet’s unprecedented warming come from fossil fuel consumption and other human activities, clawing back these carbon outputs is a multi-faceted issue. In addition to efforts to transition to renewable power sources like wind, solar, and biomass, which remain essential to mitigating this crisis, leading scientists agree that reducing emissions is not sufficient; we must go further and faster with carbon removals.

It’s estimated that we’ll need to capture and store as much as 9.5 billion metric tons of CO2 every year by 2050 to reverse legacy emissions enough to achieve international climate targets, according to the IPCC. Today, carbon removal facilities only capture a fraction of the emissions generated across the planet, and we urgently need a spectrum of high-quality solutions to scale our ability to remove carbon from the atmosphere.

At the same time, spiking energy demand – driven largely by the growing needs of data centers, particularly those underpinning artificial intelligence (AI) and blockchain technology, as well as new industrial and manufacturing facilities – also means we need to increase generation capacity rapidly to avoid an energy security crisis. This becomes more difficult to achieve through intermittent sources like wind and solar alone, which can’t be turned up and down when the grid is strained, opening an opportunity for solutions that can provide renewable, baseload power while permanently removing carbon from the atmosphere to fill this vital need.

Bioenergy with CCS – a critical technology for decarbonization

Bioenergy with carbon capture and storage (BECCS) is a carbon removal technology that uses sustainably sourced biomass to generate renewable energy while permanently sequestering the carbon underground. Because BECCS is one of the only renewable sources that can generate baseload power around the clock, seven days a week, it can serve as the backbone of renewable power grids for when the sun isn’t shining, or the wind isn’t blowing – a role fossil fuels often fill today.

At the same time, BECCS captures post-combustion carbon at the stack and pipelines it into geologic storage, permanently securing it underground. These high-quality carbon removals are more straightforward to measure in comparison with other solutions like nature-based removals, making it much simpler to quantify the overall impact achieved.

Compared to other carbon capture technologies, BECCS also has more diversified revenue streams – including renewable power generation, government incentives for carbon storage, and the sale of carbon dioxide removals (CDR) credits to offset emissions for other companies and industries. Because of this diversification, BECCS not only provides a clearer path to profitability but also offers a high-quality CDR at a much lower price point than alternatives like direct air capture (DAC). This results in a more sustainable and scalable path to adoption.

Due to these advantages, BECCS is positioned to do much of the heavy lifting regarding carbon removals, but it doesn’t replace the need for additional carbon capture and renewable energy solutions. Technologies like DAC, while costlier to operate today, will play an important role in helping to reverse legacy emissions as well; in fact, BECCS could even power DAC facilities to ensure they’re running on renewable energy. The same is true for renewable power technologies – we need far more wind and solar capacity in addition to BECCS.

Pioneering BECCS in the US and UK

Drax believes that BECCS will be integral to decarbonizing the power sector and hard-to-abate industries. To this end, Drax has launched a new independent business unit this year that is focused on becoming the global leader in large-scale carbon removals. This business unit will oversee the development and construction of Drax’s new-build BECCS plants in the US and internationally, and it will work with a coalition of strategic partners to focus on an ambitious goal of removing at least 6 Mt of CO2 per year from the atmosphere.

Previously, Drax successfully completed two BECCS pilots at Drax Power Station, the UK’s largest power station that contributes approximately 4 percent of Britain’s generation output and 11 percent of its renewables. The Drax team is now working to outfit Drax Power Station with BECCS technology that will remove an estimated 8 Mtpa of carbon while generating 10 TWh of power. This is slated to be the first carbon-negative power station in the world and is key to achieving Drax’s goal of becoming a carbon-negative company.
Drax is also pursuing an initial target in the U.S. to have two BECCS plants built and operating by the 2030s. These will be the first large-scale, biomass-fueled power stations in North America, generating an estimated total of 4 Twh of power while sequestering approximately 6 Mt of CO2 per year.

BECCS is an essential technology to help achieve global decarbonization targets. While it doesn’t replace the need for additional carbon capture and renewable power generation alternatives, its unique advantages can help reverse carbon pollution from the past while meeting the energy demands of the future.

Global collaboration
is key to tackling
the climate crisis

Leaders from 40 countries are meeting today, albeit virtually, as part of President Joe Biden’s Leaders’ Summit on Climate. The event provides an opportunity for world leaders to reaffirm global efforts in the fight against climate change, set a clear pathway to net zero emissions, while creating jobs and ensuring a just transition.

Since taking office President Biden has made bold climate commitments and brought the United States back into the Paris Agreement. Ahead of the two-day summit, he announced an ambitious 2030 emissions target and new Nationally Determined Contributions. The US joins other countries that have announced significant reduction goals. For example, the EU committed to reduce its emissions by at least 55%, also South Korea, Japan and China have all set net-zero targets by mid-century.

Here in the UK, Prime Minister Boris Johnson this week outlined new climate commitments that will be enshrined in law. The ambitious new targets will see carbon emissions cut by 78% by 2035, almost 15 years earlier than previously planned. If delivered, this commitment which is in-line with the recommendations of the Climate Change Committee’s sixth carbon budget will put the UK at the forefront of climate action, and for the first time the targets include international aviation and shipping.

What makes climate change so difficult to tackle is that it requires collaboration from many different parties on a global scale never seen before. As a UK-North American sustainable energy company, with communities on both sides of the Atlantic, at Drax we are keenly aware of the need for thinking that transcends borders, creating a global opportunity for businesses and governments to work together towards a shared climate goal. That’s why we joined other businesses and investors in an open letter supporting the US government’s ambitious climate actions.

Collaboration between countries and industries

It’s widely recognised that negative emissions technologies will be key to global efforts to combat climate change.

At Drax we’re pioneering the negative emissions technology bioenergy with carbon capture and storage (BECCS) at our power station in North Yorkshire, which when up and running in 2027 will capture millions of tonnes of carbon dioxide (CO2) per year, sending it for secure storage, permanently locking it away deep under the North Sea.

Experts on both sides of the Atlantic consider BECCS essential for reaching net zero. The UK’s Climate Change Committee says it will play a major role in removing CO2 emissions that will remain in the UK economy after 2050 from industries such as aviation and agriculture that will be difficult to fully decarbonise. Meanwhile, a report published last year by New York’s Columbia University revealed that rapid development of BECCS is needed within the next 10 years in order to curb climate change and a recent report from Baringa, commissioned by Drax, showed it will be a lot more expensive for the UK to reach its legally binding fifth carbon budget between 2028 and 2031 without BECCS.

A shared economic opportunity

Globally as many as 65 million well-paid jobs could be created through investment in clean energy systems. In the UK, BECCS and negative emissions are not just essential in preventing the impact of climate change but will also be a key component of a post-Covid economy.

Government and private investments in clean energy technologies can create thousands of well-paid jobs, new careers, education opportunities and upskill workforces. Developing BECCS at Drax Power Station, for example, would support around 17,000 jobs during the peak of construction in 2028, including roles in construction, local supply chains and the wider economy. It would also act as an anchor project for the Zero Carbon Humber initiative, which aims to create the world’s first net zero industrial cluster. Developing a carbon capture, usage, and storage (CCUS) and hydrogen industrial cluster could spearhead the creation and support of tens of thousands of jobs across the Humber region and more than 200,000 around the UK in 2039.

Under the Humber Bridge

Additional jobs would be supported and created throughout our international supply chain. This includes the rail, shipping and forestry industries that are integral to rural communities in the US South and Western Canada.

A global company

As a British-North American company, Drax embodies the positive impact that clean energy investments have. We directly employ 3,400 people in the US, Canada, and the UK, and indirectly support thousands of families through our supply chains on both sides of the Atlantic. Drax is strongly committed to supporting the communities where we operate by investing in local initiatives to support the environment, jobs, education, and skills.

From the working forests of the US South and Western Canada to the Yorkshire and Humber region, and Scotland, we have a world-leading ambition to be carbon negative by 2030. At Drax, we believe the challenge of climate change is an opportunity to improve the environment we live in. We have reduced our greenhouse gas emissions by over 80% and transformed into Europe’s largest decarbonisation project. Drax Power Station is the most advanced BECCS project in the world and we stand ready to invest in this cutting-edge carbon capture and removal technology. We can then share our expertise with the rest of the world – a world where major economies are committing to a net zero future and benefiting from a green economic recovery.

If we are to reach the targets set in Paris, global leaders must lock in this opportunity and make this the decade of delivery.

End of coal generation at Drax Power Station

Coal picker, Drax Power Station, 2016

Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)
RNS Number : 2747E

Following a comprehensive review of operations and discussions with National Grid, Ofgem and the UK Government, the Board of Drax has determined to end commercial coal generation at Drax Power Station in 2021 – ahead of the UK’s 2025 deadline.

Commercial coal generation is expected to end in March 2021, with formal closure of the coal units in September 2022 at the end of existing Capacity Market obligations.

Will Gardiner, Drax Group CEO, said:

“Ending the use of coal at Drax is a landmark in our continued efforts to transform the business and become a world-leading carbon negative company by 2030. Drax’s move away from coal began some years ago and I’m proud to say we’re going to finish the job well ahead of the Government’s 2025 deadline.

“By using sustainable biomass we have not only continued generating the secure power millions of homes and businesses rely on, we have also played a significant role in enabling the UK’s power system to decarbonise faster than any other in the world.

“Having pioneered ground-breaking biomass technology, we’re now planning to go further by using bioenergy with carbon capture and storage (BECCS) to achieve our ambition of being carbon negative by 2030, making an even greater contribution to global efforts to tackle the climate crisis.

“Stopping using coal is the right decision for our business, our communities and the environment, but it will have an impact on some of our employees, which will be difficult for them and their families.

“In making the decision to stop using coal and to decarbonise the economy, it’s vital that the impact on people across the North is recognised and steps are taken to ensure that people have the skills needed for the new jobs of the future.”

Coal in front of biomass storage domes at Drax Power Station, 2016

Coal in front of biomass storage domes at Drax Power Station, 2016

Drax will shortly commence a consultation process with employees and trade unions with a view to ending coal operations. Under these proposals, commercial generation from coal will end in March 2021 but the two coal units will remain available to meet Capacity Market obligations until September 2022.

The closure of the two coal units is expected to involve one-off closure costs in the region of £25-35 million in the period to closure and to result in a reduction in operating costs at Drax Power Station of £25-35 million per year once complete. Drax also expects a reduction in jobs of between 200 and 230 from April 2021.

The carrying value of the fixed assets affected by closure was £240 million, in addition to £103 million of inventory at 31 December 2019, which Drax intends to use in the period up to 31 March 2021. The Group expects to treat all closure costs and any asset obsolescence charges as exceptional items in the Group’s financial statements. A further update on these items will be provided in the Group’s interim financial statements for the first half of 2020.

As part of the proposed coal closure programme the Group is implementing a broader review of operations at Drax Power Station. This review aims to support a safe, efficient and lower cost operating model which, alongside a reduction in biomass cost, positions Drax for long-term biomass generation following the end of the current renewable support mechanisms in March 2027.

While previously being an integral part of the Drax Power Station site and offering flexibility to the Group’s trading and operational performance, the long-term economics of coal generation remain challenging and in 2019 represented only three percent of the Group’s electricity production. In January 2020, Drax did not take a Capacity Market agreement for the period beyond September 2022 given the low clearing price.

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/us

END