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Europe is cutting gas usage faster than UK

14 December 2022

News

European countries such as Germany are leading the way in slashing their demand for gas, according to Drax Electric Insights.
The UK is showing no signs of changing its gas consumption levels, with an exceptionally mild autumn leading to its modest reductions year-on-year.
Households could save up to £200 by turning down their thermostat by just 1°C, and save the government £3bn in funding the Energy Price Guarantee.

The independent analysis by academics from Imperial College London for Drax Electric Insights, commissioned via Imperial Consultants, shows that the UK’s gas reduction year-on-year was outpaced by Germany, France, Italy, and Spain – with demand for gas actually rising in Britain in September compared to previous years.

Change in natural gas consumption versus the previous three years in UK and comparable European countries. Data covers all sectors excluding power generation and are not adjusted for weather differences.

What reduction there was in gas use in the UK was attributable to unseasonably warm weather rather than people adjusting their behaviour. The analysis for Drax Electric Insights showed that from September, through to end of November, Britain’s gas demand was just 0.3% lower than would have been expected pre-energy crisis, when accounting for weather anomalies.

Daily natural gas consumption in UK versus expectations. The blue line shows the seasonal average for all end users except power generation over 10 years to 2020. The yellow line adjusts for weather, showing what demand would be with pre-crisis behaviour. The black line shows actual consumption.

Dr Iain Staffell of Imperial College London, and lead author of the quarterly Drax Electric Insights report, said:

“The UK is an outlier on the world stage, showing no signs of reducing its appetite for gas during a time of dramatically higher prices.

“If temperatures continue to drop during the festive season, managing the energy crisis will be both more difficult and expensive unless people and businesses break their addiction to gas. Turning the thermostat down by just 1°C would save households up to £200 a year on their energy bills and save the UK from importing 50TWh of natural gas over the winter – cutting the cost of the government’s Energy Price Guarantee by £3bn.”

On the continent, national governments have introduced demand reduction measures alongside information campaigns to inspire the public and businesses to act. In Germany, public buildings have turned down their thermostats to 19°C and outside illuminated advertising must be turned off between 10pm until 6am.

The UK Government has now launched a public information campaign on how people can claim financial support this winter alongside more technical advice on how to reduce energy use while still keeping warm, such as reconfiguring boiler settings. This followed the Chancellor announcing a further £6bn to insulate homes and upgrade boilers.

Penny Small, Drax’s Group Generation Director, said:

“As a result of Russia’s war in Ukraine the UK’s energy system is under considerable strain this winter and the combination of rising inflation and gas prices has put most household budgets under pressure.

“Britain’s long-term energy security will be strengthened by ending our reliance on expensive imported fossil fuels such as gas and instead increasing investment in homegrown renewables, and innovative green technologies such as bioenergy with carbon capture and storage (BECCS) and pumped storage hydro.”

Drax is the UK’s biggest renewable power producer by output, generating enough renewable electricity from biomass and hydro for around 5 million homes.

It plans to invest billions of pounds expanding its pumped hydro storage capacity at its Cruachan power station in Scotland and also deploying BECCS at its power station in North Yorkshire, to permanently remove 8million tonnes of carbon dioxide from the atmosphere each year by 2030.

ENDS

Media contacts:

Aidan Kerr
Media Manager
E: [email protected]
T: 07849090368

Ali Lewis
Head of Media & PR
E: [email protected]
T: 07712 670 888

Editor’s Notes

A copy of the Drax Electric Insights Q3 2022 report is available by clicking here.

Records broken during Q3 2022 include power exports reaching an all-time instantaneous percentage high of total generation – 20.9%.
Warm weather was central to gas demand reduction in the UK, with October 3°C warmer the average with a record-breaking 30°C recorded on a single-day in Gravesend.
In November, during the first three weeks just one day in the month was colder than average.
Britain’s gas demand is heavily linked to weather, with an additional 160 GWh for every degree that it falls below 15°C.
Average household savings by reducing thermostats by 1°C during the winter period (October to March) would save consumers £1-£1.50 per day.
As well as saving the country money, reducing gas demand by 50 TWh would cut carbon emissions by 10.2 million tonnes – or 3% of the UK’s total CO₂

About Electric Insights

Electric Insights is commissioned by Drax and delivered by a team of independent academics from Imperial College London, facilitated by the college’s consultancy company – Imperial Consultants. The quarterly report analyses raw data made publicly available by National Grid and Elexon, which run the electricity and balancing market respectively, and Sheffield Solar.
Electric Insights Quarterly focuses on supply and demand, prices, emissions, the performance of the various generation technologies and the network that connects them.
The quarterly reports from the last four and a half years can be access at the new website electricinsights.co.uk alongside the interactive electricinsights.co.uk which provides data from 2009 until the present.
You can embed Electric Insight’s live dashboard on your website or blog to keep track of what’s happening in the power grid through a new widget.

About Drax

Drax Group’s purpose is to enable a zero carbon, lower cost energy future and in 2019 announced a world-leading ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) technology.

Drax’s around 3,000 employees operate across three principal areas of activity – electricity generation, electricity sales to business customers and compressed wood pellet production and supply to third parties. For more information visit www.drax.com

Power generation:

Drax owns and operates a portfolio of renewable electricity generation assets in England and Scotland. The assets include the UK’s largest power station, based at Selby, North Yorkshire, which supplies five percent of the country’s electricity needs.

Having converted Drax Power Station to use sustainable biomass instead of coal it has become the UK’s biggest renewable power generator and the largest decarbonisation project in Europe. It is also where Drax is piloting the groundbreaking negative emissions technology BECCS within its CCUS (Carbon Capture Utilisation and Storage) Incubation Area.

Its pumped storage, hydro and energy from waste assets in Scotland include Cruachan Power Station – a flexible pumped storage facility within the hollowed-out mountain Ben Cruachan.

The Group also aims to build on its BECCS innovation at Drax Power Station with a target to deliver 4 million tonnes of negative CO2 emissions each year from new-build BECCS outside of the UK by 2030 and is currently developing models for North American and European markets.

Pellet production and supply:

The Group has 18 operational pellet plants and developments with nameplate production capacity of around 5 million tonnes a year.

Drax is targeting 8 million tonnes of production capacity by 2030, which will require the development of over 3 million tonnes of new biomass pellet production capacity. The pellets are produced using materials sourced from sustainably managed working forests and are supplied to third party customers in Europe and Asia for the generation of renewable power.

Drax’s pellet plants supply biomass used at its own power station in North Yorkshire, England to generate flexible, renewable power for the UK’s homes and businesses, and also to customers in Europe and Asia.

Customers:

Drax supplies renewable electricity to UK businesses, offering a range of energy-related services including energy optimisation, as well as electric vehicle strategy and management.

To find out more go to the website www.energy.drax.com

Drax Group CEO responds to the Forum for the Future report ‘BECCS Done Well’

23 November 2022

News

Will Gardiner, Drax Group CEO, said:

“This report by Jonathon Porritt and an independent panel of experts convened by the Forum for the Future confirms that bioenergy with carbon capture and storage (BECCS) will play a key role in averting the climate catastrophe. The report shows BECCS can be done well, and at scale, so that it delivers positive outcomes for the climate, nature and people. As a company with ambitions to lead the world in this critical carbon removal technology, we are excited about the possibilities our BECCS projects can bring to the forests and communities where we operate, as well as the role they will play in addressing the climate crisis.

“Drax welcomes constructive input and challenge on BECCS and we want to continue working with stakeholders to ensure that BECCS is done well and delivered to the highest standards, using strict governance and forest monitoring to ensure positive outcomes.

“BECCS is the only technology available which can permanently remove millions of tonnes of carbon dioxide from the atmosphere whilst generating the reliable, renewable power decarbonising economies need. It also has the potential to kickstart a whole new sector of the economy, creating thousands of jobs in communities which need them.

“We look forward to using the report to create a blueprint for how to do BECCS well. We will publish a full response to the report’s recommendations in due course.”

View the full report here.

A statement from Drax Group CEO, Will Gardiner on Drax’s biomass sourcing

6 October 2022

News

As the world’s leading producer and supplier of sustainable biomass, Drax is committed to ensuring the biomass we source delivers positive outcomes for the climate, for nature and for the communities in which we operate.

To be clear, not all biomass is sustainable or renewable, but when sourced in the right way it does lead to the positive outcomes we are committed to delivering, and we have clear policies and processes in place to ensure this is the case.

As CEO, I understand that achieving and sustaining these positive outcomes needs constant challenge – both internally and externally – particularly with those that don’t share our vision of the critical role biomass has to play in decarbonising our economy.

That is why my team and I dedicate so much of our time to engaging with both advocates and critics of biomass, and whilst these conversations frequently challenge us, they can ultimately make us think differently and change the way we operate for the better.

Biomass remains a relatively new part of the energy mix and it is increasingly important that accurate information is readily available for those wanting to learn more about what we do. We take all claims relating to our business very seriously and investigate them, but equally we feel it is important to identify those occasions where allegations levied against us are misleading or simply untrue.

This week, we have seen inaccurate statements about Drax that have focused primarily on the views of a vocal minority who oppose biomass. Many of these claims have sought to repeat the inaccurate views about biomass, which have for years been promoted by those who are ill-informed about the science behind sustainable forestry and climate change, and those who have vested interests in seeing the biomass industry fail. Given the severity of the false claims made, I wanted to directly address some of the issues:

1. Biomass protects and enhances the environment

Done right, biomass plays a critical role in protecting and enhancing our environment. Not only does biomass displace fossil fuels directly in the production of electricity, it also supports markets for wooden products used in construction that replace the use of other carbon intensive materials like cement.

The United Nation’s Intergovernmental Panel on Climate Change (IPCC) – the world’s leading science-based climate authority, backed by thousands of scientists – restated in their latest report the critical role that biomass will play in meeting global climate targets when sourced sustainably.

The forests that we source our biomass from are managed in accordance with best practices designed to support the health and growth of these forests over the long term. For example, in Canada, forest management has helped stop the spread of disease and forest fires that have destroyed forest ecosystems and the biodiversity which exists there.

In the South of the US, we take thinnings that help to open up the forest canopy and get light onto the forest floor, which in turn supports habitats for insects, wildflowers and species such as quail, which have been in decline.

2. Demand for pellets does not drive deforestation

Demand for pellets is not driving deforestation. Canada has a 0% deforestation rate. In the US South, forest inventory has more than doubled since the 1950s. The demand for pellets is a tiny fraction of overall demand for wooden products, less than 0.1% in the US. In Canada less than half a percent (0.36%) is harvested each year, with pellets being a fraction of that demand.

The sawdust, bark, wood chips, and thinnings as well as diseased and damaged wood produced when the forests are harvested for other sectors makes up a small proportion of the total fibre harvested – just 5% in British Columbia and 4% in the south of the US. (Forest harvest statistics show wood pellet production (woody biomass) accounts for about 4% of material harvested in the US according to UN’s FAOSTAT Forestry. In British Columbia, 74 million cubic meters (m3) harvested through the BC Annual Allowable Cut, converted to metric tonnes (mt) is about 45 million mt. BC exported 2.37 million mt of wood pellets, which is 5.3% of overall harvest).

3. What are Category Two Licences and why does Drax hold them?

Under the Category Two Licence programme in British Columbia, Canada, Drax is eligible to bid for tenure agreements on plots of land that are issued by the British Columbia Timber Sales Programme (BCTS) which is an arm of Government.

The Category Two Licence program is based on a well-established and legislated process.

The bidding procedure is a sealed, online process and if successful, Drax has a power of attorney (POA) in place where all harvesting obligations become the responsibility of the sawmilling company that holds the POA. This practice is permitted under the terms of the BCTS.

It is the sawmill company which controls the harvesting and sorting processes of the forest material and thereby ensures that it gets what it needs. Drax is not involved in the harvesting or sorting process.

We have arrangements with the sawmills we work with to supply us with sawmill residuals – sawdust, chips and bark which is used to produce wood pellets in exchange for the rights to the timber on Category Two Licences. The economics of the wood pellet industry do not facilitate full scale harvesting for the manufacture of pellets.

Drax’s name stays on the licence’s paperwork because the company is the bid winner. This does not mean Drax undertakes any harvesting activity.

Drax currently holds two Category Two Licences in British Columbia. At this time, we are not bidding for any more Category Two Licences in British Columbia.

The BBC claimed that one of the plots of land they featured would not have been harvested had Drax not bid on it – because there were no other bidders. In circumstances where no one bids on a plot of land, the British Columbia Government often puts it up for auction again.

4. The BBC was wrong to give a false impression that logs were being taken from the two featured Category Two Licence areas and taken to our Meadowbank pellet plant in British Columbia

Drax did not receive any material from the two featured Category Two Licence areas in the BBC’s Panorama programme.

The truck the BBC followed and showed taking logs to the Meadowbank facility was, we believe, visiting a different area of forest to the locations of either of our Category Two Licence areas.

In the programme, the reporter says they followed the logging truck “60 miles (95km) north on the highway”, before turning off on the logging road. We don’t know where they went but we know the licenses that are in our name are 350km away from our Meadowbank facility.

The logs on that truck were what’s categorised in the forestry industry in British Columbia as left-over material that sawmills don’t want.

One of the two Category Two Licence sites the BBC focused on was felled and cleared by the sawmill company in December 2021. Whilst this sawmill did provide us with residuals relating to our agreement with them, it did not come from this site.

The forest companies control the sorting and harvesting process, to ensure they get the materials they need. Drax is not involved in that process.

Forest companies harvest the forests and cut the trees into log lengths and sort the portions by multiple product class. Usually this falls into two grades – sawlog grade logs for sawmills and pulp logs for pulp mills.

Sawlogs go to the sawmills and the rest go to where there is a market for them – if there isn’t a market, it becomes left-over and we may take it.

5. Why did the programme show slash being left on the forest floor after harvesting?

Slash is a term used for the very low-grade material which is not merchantable.

Under the British Columbia Government harvesting rules, slash can be left on sites for up to two years to dry out before being taken to a pellet mill or burned on site.

The company we gave the POA to for the harvest of this site will ensure the slash is managed appropriately in line with the British Columbia Government’s regulations.

6. Drax’s Category Two Licences are not areas of primary forest

Primary forest is a term which organisations interpret differently. Drax, and many other organisations, refer to the UN Food and Agriculture Organization definition for primary forest which indicates that primary forests have “no clearly visible indications of human activities”.

Drax has not acquired any Canadian licences for forests designated as primary forests under the UN Food and Agriculture Organization definition.

The BBC’s footage clearly showed that one of the Category Two Licence sites had a nearby road and in the British Columbian Government harvest plan for one of these sites there is a specific requirement for the “700 Road to be screened”.

In our opinion this is evidence that this area was not primary forest and we did not take any material directly from this site.

Areas identified by the Government for harvest are carefully selected by them using an exhaustive list of environmental criteria that includes but is not limited to; old growth management; landscape and site level biodiversity; age class distribution (old growth); riparian management; watershed management; wildlife management; visual quality; species at risk; rare and sensitive ecosystems; cultural heritage resources; soil quality; species diversity; site productivity; as well as social and economic considerations.

7. Does Drax use logs which should instead be sent to sawmills to make wood products?

No. To date in 2022, the material used in our Canadian pellet plants includes 81% sawmill residuals, 8% harvest residuals and 10% roundwood, including pulp logs (grade 4).

All materials are sorted and graded by the sawmill/lumber operator before delivery to Drax. The Grade 4 logs that we use are not higher quality logs. These can be pulp grade logs, but if there is no market for pulp logs then when the sawmills harvest and sort the logs, they become leftover from sawmill material and are often then used by Drax to make pellets.

Commercial forestry is driven by a demand for high grade saw logs, which are processed in sawmills, with the resultant timber then used in construction and manufacturing.

The material that is not used for these purposes – because it is often diseased, mis-shapen or uneconomic – could be used for producing biomass, in line with our sourcing policy.

8. Rigorous independent oversight plays an important part in the governance of the biomass industry

Drax adheres to all required legislation, regulations and standards which govern the energy sector, Drax’s businesses and its supply chains. It ensures the ongoing sustainability of its feedstock in accordance with the required legislation.

The carbon accounting rules that underpin these regulations and standards have been developed in accordance with world leading international science from the UN IPCC 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories and are derived from international frameworks such as the EU’s Renewable Energy Directive (“RED”).

Companies which use biomass are required to measure and report on supply chain emissions. These requirements are unique in that they are stricter and more onerous than what is required for other energy generation technologies. As a result, Drax reports on its full supply chain and associated emissions to Ofgem under legislative requirements (including the Renewables Obligation and CfD).

Drax also provides extensive information to voluntary certification schemes, such as the Sustainable Biomass Program (SBP), FSC and SFI which provide third party oversight to ensure the material we are using meets the required sustainability standards.

We publish a comprehensive overview of this data in our Annual Reports (including data on Scope 1 and 2 emissions and emissions intensity figures which are audited).

Drax makes all data and information on its emissions and catchment areas, including evidence of forest growth, growing stock, and sequestration rates (forest productivity), available for public consumption. Our supply chain emissions are reported in full in our annual report and accounts. We report all of our emissions (scope 1, 2 and 3).

In addition to this, due to the British Columbia Government’s rigorous legislative system and British Columbia Timber Sale’s SFI certification, we have every confidence that areas selected for harvest, including under the Category 2 programme, are done so to fulfill a government management objective.

This is done as part of the long-term harvest planning process by government, with industry and other stakeholders who have interests in the land, including First Nations and the general public.

Sustainable biomass is increasingly being recognised by governments and scientists around the world as having the potential to play a critical role in tackling the climate crisis, supporting communities and contributing to energy security, and I hope this information reiterates our commitment to sustainability which sits at the heart of our purpose and everything we do.

Will Gardiner, Drax Group CEO

View our response to the BBC Panorama episode here and more information on biomass sourcing from Canada here.

Drax response to BBC Panorama programme on Canadian Forestry

3 October 2022

News

A Drax spokesperson said: “Canada has some of the most highly regulated forests in the world which ensures the forests in British Columbia (BC) are managed properly and provide positive benefits to nature, the climate and people.

“People living in and around these forests are best placed to determine how they should be looked after, not the BBC. Drax’s own world-leading sustainable sourcing policies are aligned with the rigorous regulatory frameworks and rules set by both the BC and UK governments.

“The UN’s IPCC – the world’s leading science-based climate authority, backed by thousands of scientists – restated in their latest report the critical role that biomass will play in meeting global climate targets when sourced sustainably. Biomass is used by countries around the world to provide reliable renewable energy, whatever the weather, which displaces fossil fuels like coal from energy systems, supporting climate targets.

“In this edition of Panorama, the BBC has focused primarily on the views of a vocal minority who oppose biomass. The programme makers have sought to repeat the inaccurate claims about biomass which have for years been promoted by those who are ill-informed about the science behind sustainable forestry and climate change and those who have vested interests in seeing the biomass industry fail. Good journalism should start from a neutral position to seek out the facts.

“The Panorama team did not contact us while they were conducting their research in Canada to arrange to visit our facilities.

“From the outset we were presented with a series of one-sided assertions from the BBC. Our lawyers have written to the BBC to remind them of their legal and regulatory obligations and we are considering further action.

“At Drax, we are open and transparent about our operations and since becoming aware of the production team’s visit to Canada, many people across our business have collectively spent hundreds of hours engaging with them in an effort to encourage an accurate portrayal of our business and the wider forestry industry.

“As anyone in the BC forestry industry knows, the forests there are not harvested for biomass, they are harvested for high value timber used in construction. 80% of the material used to make our pellets at Drax in Canada is sawmill residues – sawdust, wood chips and bark left over when the timber is processed. The rest is waste material collected from the forests which would otherwise be burned to reduce the risk of wildfires and disease. This is the material used by Drax to produce 12% of the UK’s renewable and secure electricity, playing a vital role in keeping the lights on for millions of homes and businesses.”

Britain sending Europe power lifeline – report

30 September 2022

News

Britain exported more power to Europe than ever before in the second quarter of the year, making it a net exporter of electricity for the first time in over a decade, according to a new report.
The new trade surplus with Europe was worth around £1.5 billion for the UK economy during the period.
The energy crisis in Europe may have shone a light on an opportunity for Britain to become ‘Europe’s power battery’ by investing in long duration electricity storage technologies.

For the first time in over a decade, Britain became a net exporter of electricity to its European neighbours, making around £1.5bn for the economy in three months.

An independent report by academics from Imperial College London for Drax Electric Insights, commissioned via Imperial Consultants, shows that in the three months to June 2022, 8% (5.5TWh) of the electricity generated by Britain was exported abroad – the largest amount on record.

Whilst Russia throttled gas supplies and France suffered severe reliability problems with its nuclear power stations, Britain developed a trade surplus in electricity with the rest of Europe.

The excess was exported abroad through subsea cables known as interconnectors.

Share of British electricity that was imported and exported each quarter.

The report’s authors estimate the trade surplus was worth around £1.5 billion for the UK economy during the three months to June.

Dr Iain Staffell of Imperial College London, and lead author of the quarterly Electric Insights report, said:

“Britain has played an important role in helping to keep the lights on across Europe amid the deepening energy crisis which is being weaponised by Russia against our nearest neighbours.

“With Europe now facing long-term security of supply problems, there could be an economic argument for Britain to step up investment in power production in the years ahead to build an even bigger trade surplus, and protect our nation from damaging energy shortages.”

Another country highlighted by the report to have exported more power than usual to the continent was Norway, with its vast hydro reservoirs being drained to their lowest levels since 1996. Even Britain was a net importer of power from the Scandinavian state over the period, using the country’s enormous hydro storage capacity to balance out drops in supply from intermittent sources of electricity such as wind and solar farms.

The Electric Insights report states there could be “value in increasing the amount of pumped hydro energy storage in the UK” to balance shortfalls in supply from renewables, rather than relying on Norwegian imports. The UK has just under 3GW of pumped storage hydro capacity, less than half of the capacity of comparable countries like Germany.

While the need for the UK to have greater long duration energy storage capacity is growing, barriers to securing private investment in these projects means it has been almost 40 years since a new pumped storage hydro power station was built here.

There are growing calls from the energy industry for the government to introduce measures to support the roll-out of a new generation of long duration storage plants.

Drax is progressing plans to build a new 600 MW underground pumped storage hydro facility at its existing Cruachan site in Scotland.

Ian Kinnaird, Drax’s Scottish Assets Director, said:

“Britain desperately needs a new generation of pumped storage hydro plants to strengthen its own energy security, but it is clear the rest of Europe would benefit as well.

“We have the opportunity to become Europe’s power battery, helping our friends and neighbours reduce their dependence on energy from Russia whilst enabling more homegrown renewable electricity to power UK homes and businesses. It’s an opportunity which Britain should take, or risk being left behind by other countries.”

ENDS

Media contacts:

Aidan Ker
Media Manager
E: [email protected]
T: +44 (0)7849090368

Ali Lewis
Head of Media & PR
E: [email protected]
T: +44 (0)7712 670 888

Editor’s Notes

[Click image to view/download the report PDF or alternatively read the report webpage here]

A copy of the Drax Electric Insights Q2 2022 report is available by clicking here.

The report found Britain had a trade surplus of 5% of electricity generated (8% exported minus 3% imported), with a net value of £500m per month.
Historically, Britain has been an importer of electricity, with an average of 8% of electricity coming from our neighbours over the last decade.
In May, Drax applied for consent to build a new 600MW pumped storage hydro plant at its existing Cruachan facility in Argyll, Scotland.
The new power station could be operation in 2030 with construction work getting underway in 2024.
No investment decision has yet been taken and development remains subject to the right regulatory framework with the UK government.
Last month, Switzerland opened Europe’s latest pumped storage hydro plant under the Alps. The plant has the same storage capacity as 400,000 electric vehicle batteries.

About Electric Insights

Electric Insights is commissioned by Drax and delivered by a team of independent academics from Imperial College London, facilitated by the college’s consultancy company – Imperial Consultants. The quarterly report analyses raw data made publicly available by National Grid and Elexon, which run the electricity and balancing market respectively, and Sheffield Solar.
Electric Insights Quarterly focuses on supply and demand, prices, emissions, the performance of the various generation technologies and the network that connects them.
The quarterly reports from the last four and a half years can be access at the new website reports.electricinsights.co.uk alongside the interactive electricinsights.co.uk which provides data from 2009 until the present.
You can embed Electric Insight’s live dashboard on your website or blog to keep track of what’s happening in the power grid through a new widget.