Innovation: Drax Group's Big Biomass Strategy
Published: 25 January 2009
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5 pages, 2 figures
Executive Summary
Drax Group, the operator of Europe’s largest coal-fired power station, has diversified its power generation business into biomass. By mid-2010 the firm expects to have 500MW of co-fired coal/biomass generation capacity. The firm is investing £2 billion to build three 300MW dedicated biomass generation facilities with a target operational date of 2014. The carrots and sticks of climate change policy have driven the business logic behind the investment plans. In the first half or 2008 Drax Group paid out £108 million to acquire EU Emissions Trading scheme compliance credits. The UK’s Renewable Obligation Certificates (ROCs) also underpin the business case. Drax Group faces new risks to scale up a sustainable biomass supply chain.
TABLE OF CONTENTS
DRAX GROUP’S £2 BILLION PUSH INTO BIOMASS STRATEGY
Drax Group’s Biomass Strategy: 900MW By 2014
Financial Impacts Of Climate Change Policy Drive Drax Group’s Diversification
Investment Success Depends On The Biomass Value Chain
TABLE OF FIGURES
Figure 1. Drax Group CO2 Emissions Continue To Increase
Figure 2. By 2014 Drax Group Will Require 5.4 Million Tonnes Of Biomass A Year