Tag: investors

Capital Markets Event and Trading Update

15 June 2017

Investors
RNS Number : 1264I
Drax Group PLC
(Symbol: DRX)

Capital markets event

Drax is today hosting a capital markets event for investors and analysts.

The event will provide an update on the Group’s strategy, outlining a plan for 2025 EBITDA in excess of £425(1) million – more than a third of which is expected to come from Retail (>£80 million) and Biomass Supply (>£75 million) operations. This will be delivered by maximising the opportunities from the existing portfolio of assets and targeted value creative investment in long-term growth opportunities, underpinned by a robust financial model and capital allocation plan.

The event will provide further insight into the Group’s three areas of operation and how these support the strategy:

Retail – an annuity-like income stream with profitable SME(2)and I&C(3) businesses; 

Generation – visible biomass earnings, flexible operations, the development of options for rapid response gas and long-term opportunities to repurpose coal assets; and

Biomass Supply – lower cost, good quality pellets, with visible earnings and the capacity to provide at least 30 per cent of the Group’s fuel requirements.

These activities are underpinned by safety, sustainability, operational excellence and expertise in our markets. Drax is committed to using research and innovation to help reduce supply chain costs, identify new long-term opportunities and to maximise value across the Group.

The event will be led by Dorothy Thompson, Group CEO, supported by the senior management team from across the business.

Dividend policy and capital allocation

Following discussion with shareholders, Drax today announces a new dividend policy.

Drax expects to pay a growing dividend consistent with maintaining its credit rating and investing in its business.

Drax expects to recommend a dividend of £50m with regards to the 2017 financial year. The Board is confident that this dividend is sustainable and expects it to grow from this level as the implementation of the strategy generates an increasing proportion of stable earnings and cash flow. In determining the rate of growth in dividends the Board will take account of future investment opportunities and the less predictable cash flows from the Group’s commodity-based businesses.

If there is a build-up of capital in excess of the Group’s investment needs the Board will consider the most appropriate mechanism to return this to shareholders.

Dorothy Thompson said:

“Britain’s energy market is changing. Drax has embraced these changes with a strategy which will help change the way energy is generated, supplied and used for a better future.

“Through our operations in retail, generation and biomass supply we expect to deliver a significant increase in high quality, visible, contracted earnings for the Group.

“With the optimisation of our existing asset portfolio combined with acquisitions across our markets the strategy is already delivering, allowing the Group to create long-term opportunities in all areas of the business.

“We are confident in the strategy and our ability to deliver high quality earnings, growth and value for shareholders, supported by a strong financial model and clear capital allocation policy, including a sustainable dividend that we expect to grow from a level of £50m in 2017.” 

Trading and Operational Performance

Since publishing our full year results on 16 February 2017, trading conditions in the markets in which we operate have remained unchanged and operational performance has been good.

These factors underpin our expectations for full year EBITDA(4), which remain unchanged.

Capital markets webcast and presentation material

The event will be webcast from 9.30am and the material made available on the Group website at the same time. Joining instructions for the webcast and presentation are included in the links below.

https://cache.merchantcantos.com/webcast/webcaster/4000/7464/16531/90093/Lobby/default.htm

https://www.drax.com/investors/capital-markets-day/

Notes:

(1)   Three business areas, including an assumed central cost, based on £21mactual in 2016.

(2)   Small and Medium-sized Enterprise.

(3)   Industrial and Commercial.

(4)   EBITDA is defined as profit before interest, tax, depreciation, amortisation and unrealised gains and losses on derivative contracts.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Enquiries:

Drax Investor Relations:

Mark Strafford

+44 (0) 1757 612 491

+44 (0) 7730 763 949 

Media:

Brunswick:

Simon Maine

Mike Smith

+44 (0) 207 404 5959

Drax External Communications:

Paul Hodgson

+44 (0) 1757 612 026

Website: www.drax.com

Chief Executive comments on capital markets event and trading update

Dorothy Thompson, (2005-2017 Chief Executive, Drax Group)

Investors

Britain’s energy market is changing. Drax has embraced these changes with a strategy which will help change the way energy is generated, supplied and used for a better future.

Through our operations in retail, generation and biomass supply we expect to deliver a significant increase in high quality, visible, contracted earnings for the Group.

With the optimisation of our existing asset portfolio combined with acquisitions across our markets the strategy is already delivering, allowing the Group to create long-term opportunities in all areas of the business.

We are confident in the strategy and our ability to deliver high quality earnings, growth and value for shareholders, supported by a strong financial model and clear capital allocation policy, including a sustainable dividend that we expect to grow from a level of £50m in 2017.

Further information:

Capital markets day and trading update

Image: Artist’s impression of a Drax rapid-response gas power station with planning permission

What does the internet of things mean for energy?

2 June 2017

Electrification

Internet of things (IoT) technology, which connects everyday appliances to one another allowing them to collect data and become ‘smart’, presents an exciting view of the modern home or workspace.

The future IoT-enabled office or household is one with autonomous appliances, remote-operated thermostats, and fridges that monitor their contents and reorder supplies when they run low. You may never go hungry again.

There’s arguably an even brighter future for the IoT’s potential in industry – it can bring about value through applications like predictive maintenance and performance optimisation.

On paper these two scenarios – that of industrial optimisation and convenience throughout our daily lives – might seem worlds away. But James Robbins, Chief Information Officer at Drax, is thinking about how to bring them together – particularly when it comes to energy use.

Central to the approach is a question: could a better understanding of how households and businesses use energy change how it’s generated and provided?

The importance of data

At its heart, the IoT is about data. What data you collect and how you use it determines what value you can create, says Robbins. He explains: “Whether you’re talking about the IoT, big data, artificial intelligence [AI] or robotics – they’re all the modernisation of information collection and use.”

And nowhere is this more applicable than at a large-scale power station. “At Drax we’re used to managing what’s basically our own private IoT in the station,” he explains. “The real-time control systems we have for the generators and the Grid are essentially a bunch of sensors tied to a central network.” These sensors collect data from the power station, which then help optimise it for better performance.

The same approach to data collection can have benefits for bill payers, too.

Tracking energy use in the workspace and home

Connected devices like smart meters can bring a precise level of insight into energy usage in the home and places of work, which can benefit both end users and suppliers of heat and power. Electricity generators and heating fuel suppliers can use this data to better manage their output by being able to predict how and when it will be required. For end users, it can help them and their energy suppliers more accurately track what they use, where they use it and how they could use it more efficiently.

For example, using IoT technology a gas or wood pellet for heat supplier may be able to identify that a home can make substantial cost savings just by turning down their heating by one degree. “Sensors and smart technology can give us that insight,” says Robbins.

This level of optimisation is already possible to a degree using existing tools, but Robbins sees a future with greater possibilities. For example, with comprehensive datasets, suppliers can compare business owners’ energy use with others in the same sector and region to highlight efficiencies.

“The whole thing is about making it easier for us to serve the customer,” says Robbins. And the better the dataset, the more exotic the services could be.

“Just looking at meters means we can only really talk to the bill payer. But who else in the home or workplace could we engage with to get them to conserve energy? For instance, we could develop a game for child in the house that’s linked to energy use, where they get points for turning off lights or turning down heating,” he explains.

The gamification of energy use is – at this stage – just an idea, Robbins says, but it is exactly the kind of thing that better data allows energy suppliers and generators to think about.

A challenging journey, but an exciting one

The IoT approach to energy generation and use won’t be without its challenges – security being one major concern. But there will also be substantial technical and standardisation issues any provider keen to leverage IoT must tackle to make it a truly effective technology.

“In the 80s, you couldn’t play a VHS cassette in a Betamax player,” Robbins explains. “The compatibility issue with IoT could be an even bigger problem – all these gadgets need to be built into an architecture that can handle them and make them work together.”

Consider the so-called smart meter that provides data for a customer’s itemised bill. The bill payer is told that a tumble dryer in their home is using a significant proportion of the power they are paying for. The problem is that their appliances and devices have not been meshed together in a way that gives the system sufficient context about the customer’s situation. In the worst-case scenario, the customer asks for a refund and switches supplier because they don’t actually have a tumble dryer.

Robbins and his team are working with Drax suppliers to make sure that compatibility and context don’t become a problem. He aims to ensure that unintended consequences in the Group’s use of IoT are only of the positive variety. By investing in back-office infrastructure that can use big data processing to ingest and analyse meter data down to the 10-second level, Drax can take advantage of smart tech when it arrives in earnest.

It’s an exciting period of technological advancement – but as Robbins is keen to point out, it’s only the start.

“It’ll probably only be over the next few years that we actually begin to really understand how to leverage IoT data, when we pass the tipping point of user adoption. When that happens, we’ll be starting a very exciting journey with a clearer purpose – to spot and solve meaningful problems faced by people and businesses, in context, in real-time.”

What is a working forest?

1 June 2017

Sustainable bioenergy
An illustration of a working forest

For centuries, civilizations have relied on forests and forest products. Forests provided fuel, food and construction materials, and there were plenty of them.

But when, in 18th century Europe, the needs of growing industrialisation sent development into overdrive, a problem arose: forests were struggling to meet demand.

In Germany, the problem was acute. The growing steel industry had increased demand for wood to power its smelters and for wood used in mining operations. Large areas of forestland were stripped to meet industry’s needs and overall supply was quickly decreasing.

No one was more acutely aware of the challenge than Hans Carl von Carlowitz, who at the time was the head of the Saxon mining administration.

So, in 1713 he published ‘Silvicultura Oeconomica’, a book which advocated the conservation and management of German forests so they could provide for industries in the long term. Although he drew on existing knowledge from around Europe, it was the first time an important term was used: Nachhaltigkeit, the German word for sustainability.

Carlowitz explained this new term: “Conservation and growing of wood is to be undertaken in order to have a continuing, stable and sustained use, as this is an indispensable cause, without which the country in its essence cannot remain.”

It was arguably the start of the scientific approach to forestry, and although our needs of forests have changed (as have the words we use to describe them – working forest, plantation forest and managed forest all refer to largely the same thing), that same principle is at the heart of how a modern working forest functions: to ensure what exists and is useful today will still be there tomorrow.

This approach relies on responsible forest management, which sets out a few key principles on how a forest should be managed to sustain its life.

Providing room to breathe

Working forests are commonly managed to produced sawlogs – high value wood that can be sawn to make timber for construction or furniture. For a forester to optimise the quality and quantity of sawlogs, regular thinning is required. Thinning is the process of periodically felling a proportion of the forest to aid its overall health and vigour. This means there are fewer trees fighting for the same resources (water, sunshine, soil). More than that, thinning can promote diversity by providing more light and space for other flora.

Thinning can occur several times in a forest’s cycle. It can be used to increase the size and quality of the remaining trees and also to encourage new seedlings to establish in place of the harvested trees when managing for continuous forest cover.

Nothing should be wasted

The roundwood produced by thinning is often too small to be sold as sawlogs, but that doesn’t mean it’s worthless. It can be sold to the pulp industry to make paper, or for particleboard or to the biomass industry to make compressed wood pellets, which can be used to fuel power generation – as is done at Drax Power Station. These industries also provide a market for the lower grade roundwood removed when the more mature trees are finally harvested.

In areas where there was no robust market for this low grade wood, it would often be left on site and become a fire risk or a haven for pest and disease attack. Too much low grade material left on site can also inhibit the regrowth of the next tree crop. So markets for this material are important for the health of the forest and the value of the land to the forest owner. Also in the Baltic countries markets for pulpwood are limited and the energy sector provides a valuable opportunity to clear the site for replanting and provide additional revenue to the forest owner.

This process of utilising all parts of the forest is essential for a healthy working forest. On the one hand, the revenue can cover the cost of thinning. This husbandry enhances the quality of the final tree crop and ensures that money is available to invest in future planting and regeneration, ensuring the forest area is consistently maintained and improved.

The carbon benefits of a working forest

Rather than diminishing it, actively managing a forest helps its ability to sequester – or absorb and store – more carbon.

Carbon sequestration is directly related to the growth rate of a tree – a young, growing tree absorbs more carbon dioxide (CO2) from the atmosphere than an older one. Older trees will have more carbon stored (after a ‘childhood’ spent absorbing it), but if these are not harvested they are more susceptible to fire damage, pests and diseases and their carbon absorption plateaus.

In an actively managed forest, older trees ready for sawlog production can be harvested and replaced with vigorously growing young trees and in the process maximise the CO2 absorption potential of the forest.

The by-products of this process – the low grade wood and thinnings – can be used for the pulp and biomass industry, which both aids the health of the remaining forest, and provides revenue for the forester to invest in the long term life of his or her forest.

Three centuries of sustainability

In the 300 years since Carlowitz published his book on sustainability a lot has changed. And while it’s unlikely he foresaw forests providing fuel for renewable electricity and renewable heat, the approach remains as relevant.

What is a working forest? It is one that is as productive and healthy tomorrow as it is today. That we’re using the same resource today as we were 300 years ago is evidence to suggest it’s a practice that works.

Batteries as big as biomass domes?

24 May 2017

Sustainable bioenergy

Renewables are playing a bigger part of our electricity mix as the UK moves towards a low carbon economy. How we ‘plug the gaps’ left by intermittent renewables is among the greatest challenges faced by the energy sector.

Sources like wind and solar are intermittent – they can’t generate electricity all the time. When the sun doesn’t shine or the wind doesn’t blow they lack the fuel needed to generate power and can’t feed into the grid.

This leaves a gap in the UK’s electricity supply that needs to be filled. Today that’s done by sources like coal, gas and biomass which can be dialled up and down to accommodate for the dips and peaks in generation created by changes in demand and the weather.

One alternative being touted as a possible solution is storage and in particular, battery technology. However, creating batteries on a scale big enough to meet our incredible demand is a considerable challenge. It’s a challenge that will be met in a future where giant, affordable batteries are able to store solar power captured in the summer months for use in the winter. But costs would have to come down at an even faster rate than they have done in recent years.

The challenge of building bigger batteries

To demonstrate the size of this challenge, consider the biomass storage domes at Drax Power Station. These effectively operate as giant energy stores with the flexible ability to quickly feed renewable fuel to the power station, which generates electricity on demand.

Our biomass domes can hold 300,000 tonnes of sustainably-sourced compressed wood pellets, the equivalent of 600 GWh worth of electricity. Currently, batteries cost £350 per kWh, meaning at present prices it would cost £210 billion to replace the capacity of all four of our biomass domes using battery power.

Even if battery technology advances dramatically over the next few years that figure is only likely to fall to around £60 billion. Then there is the question of the ancillary services that thermal power stations provide. The batteries of the future may be able to provide these vital services (such as synthetic inertia, short-term reserve and reactive power), but for now, providing these via battery power is prohibitively expensive and in some cases best left to biomass and gas power stations.

We should not underestimate the challenges ahead. The UK’s ever-changing power system will need to balance more electricity generated via wind and solar with affordable solutions that are also reliable, flexible and lower carbon than coal. This is why Drax is developing four rapid-response gas power stations in addition to continuing its investment in biomass generation and supply.

Everything you ever wanted to know about cooling towers

17 May 2017

Power generation
Close up image of Drax cooling tower

Cooling towers aren’t beautiful buildings in the traditional sense, but it’s undeniable they are icons of 20th century architecture. They’re a ubiquitous part of our landscape – each one a reminder of our industrial heritage.

Yet despite the familiarity we have with them, knowledge about what a cooling tower actually does remains limited. A common misconception is that they release pollution. In fact, what they actually release is water vapour – similar to, but nowhere near as hot, as the steam coming out of your kettle every morning. And this probably isn’t the only thing you never knew about cooling towers. 

What does a cooling tower do?

As the name suggests, a cooling tower’s primary function is to lower temperatures – specifically of water, or ‘cooling water’ as it’s known at Drax.

Power stations utilise a substantial amount of water in the generation of electricity. At a thermal power plant, such as Drax, fuel is used to heat demineralised water to turn it to high pressure steam. This steam is used to spin turbines and generate electricity before being cooled by the cooling water, which flows through two condensers on either side of each of the steam turbines, and then returning to the boiler. It is this process that the cooling towers support – and it plays a pivotal role in the efficiency of electricity generation at Drax’s North Yorkshire site.

To optimise water utilisation, some power stations cycle it. To do this, they have cooling towers, of which at Drax there are 12. These large towers recover the warmed water, which then continues to be circulated where chemistry is permitting.

The warmed water (about 40°C) is pumped into the tower and sprayed out of a set of sprinklers onto a large volume of plastic packing, where it is cooled by the air naturally drawn through the tower. The plastic packing provides a large surface area to help cool the water, which then falls in to the large flat area at the bottom of the massive structure called the cooling tower pond.

As the water cools down, some of it (approximately 2%) escapes the top of the tower as water vapour. This water vapour, which is commonly mistakenly referred to as steam, may be the most visible part of the process but it’s only a by-product of the cooling process.

The majority of the water utilised by Drax Power Station is returned back to the environment, either as vapour from the top of the towers or safely discharged back to the River Ouse. Each year, about half of the water removed from the river is returned there. In effect, it is a huge amount of water recycling and in environmental terms, it is not a consumptive process.

Close-up of side of Drax cooling towers

How do you build a cooling tower?

The history of cooling towers as we know them today dates back to the beginning of the 20th century, when two Dutch engineers were the first to build a tower using a ‘hyperboloid’ shape. Very wide on the bottom, curved in the centre and flared at the top, the structure meant fewer materials were required to construct each tower, it was naturally more robust, and it helped draw in air and aid its flow upwards. It quickly became the de facto design for towers across the world.

The Dutch engineers’ tower measured 34 metres, which at the time was a substantial achievement, but as engineering and construction abilities progressed, so too did the size of cooling towers.

Today, each of 12 towers measures 115 metres tall – big enough to fit the dome of St Paul’s Cathedral or the whole of the Statue of Liberty, with room to spare. If scaled down to the size of an egg, the concrete of each cooling tower would be the same thinness as egg shell.

The structures at Drax are dwarfed by the cooling towers at the Kalisindh power plant in Rajasthan, India, the tallest in the world. Each stands an impressive 202 metres tall – twice the height of the tower housing Big Ben and just a touch taller than the UK’s joint fifth tallest skyscraper, the HSBC Tower at 8 Canada Square in London’s Canary Wharf.

The industrial icon of the future

Today’s energy mix is not what is used to be. The increased use of renewables means we’re no longer as reliant on fossil fuels, and this has an effect on cooling towers. Already a large proportion of the UK’s most prominent towers have been demolished, going the same way as the coal they were once in service to. But this doesn’t mean cooling towers will disappear completely.

Power stations such as Drax, which has upgraded four of its boilers to super-heat water with sustainably-sourced compressed wood pellets instead of coal, the dwindling coal fleet, and some gas facilities still rely on cooling towers. As they continue to be part of our energy mix, the cooling tower will remain an icon of electricity generation for the time being. But it’ll be a mantle it shares with biomass domes, gigantic offshore wind turbines and field-upon-field of solar panels – the icons of today’s diverse energy mix.

View our water cooling towers close up. Drax Power Station is open for individual and group visits. See the Visit Us section for further information.

Completion of Acquisition of Louisiana Pellets

26 April 2017

Investors
RNS Number : 3839D
Drax Group PLC
(Symbol: DRX)

Following a court hearing to approve the result of an auction on 30 March 2017, Drax has now completed the acquisition of substantially all of the assets of Louisiana Pellets(1). The acquisition price was $35.4m.

Louisiana Pellets will provide additional biomass pellet capacity in the region of 450k tonnes pa, playing an important part in Drax’s strategy to build a flexible supply chain capable of self-supplying 30% of its generation requirement.

The plant is expected to return to service by early 2018 following incremental investment to upgrade and optimise the facility.

Dorothy Thompson, Chief Executive Officer of Drax Group, said:

“Louisiana Pellets marks another positive step in delivering the Drax Group strategy.

“The deal forms part of our plan to significantly increase our capability to manufacture high quality compressed wood pellets and increase self-supply to Drax Power Station.

“Upgrading half the Power Station to use sustainable wood pellets has resulted in Drax producing 16% of the UK’s renewable electricity and with the right conditions we aim to do more.”

Enquiries:

Drax Investor Relations:

Mark Strafford

+44 (0) 7730 763 949

Media:

Drax External Communications:

Paul Hodgson

+44 (0) 1757 612026

Ali Lewis

+44 (0) 1757 612165

Website: www.drax.com

Notes:

(1)   Louisiana Pellets is the owner and developer of a wood biomass pellet manufacturing facility located in Urania, Louisiana.

END

Pricing of offering of senior secured notes due 2022

21 April 2017

Investors
London Skyline with cranes
RNS Number : 0509D
Drax Group PLC
(Symbol: DRX)

Drax Group plc’s (“Drax”) indirect wholly owned subsidiary, Drax Finco plc, has today priced its offering of £350 millionsenior secured fixed rate notes due 2022 (the “Fixed Rate Notes”) and £200 million senior secured floating rate notes due 2022 (the “Floating Rate Notes” and together with the Fixed Rate Notes, the “Notes”).

The Fixed Rate Notes will bear interest at a rate of 4.25 per cent. per annum and will be issued at 100 per cent. of their nominal value.  

The Floating Rate Notes will bear interest at an annual rate of 3 month LIBOR (subject to a zero per cent. floor) plus 4.0 per cent. per annum and will be issued at 100 per cent. of their nominal value.    

The proceeds from the offering of the Notes, together with cash on hand will be used as part of a refinancing of Drax’s existing debt.

An amendment to the current £400 million credit facility is also expected to become effective on or around 5 May. Under the amendment, an aggregate principal amount of £350 million will be made available to Drax Corporate Limited. It is expected that approximately £35 million will be drawn at closing.

Drax has also extended its existing commodity trading facility, to include gas related commodity trades in addition to the existing power and dark green spread facility. The extension of the commodity trading facility allows Drax to transact prescribed volumes of trades without the requirement to post collateral.  

Enquiries:

Drax Investor Relations:

Mark Strafford

+44 (0) 1757 612 491 

Media:

Drax External Communications:

Paul Hodgson

+44 (0) 1757 612026

Website: www.drax.com

Cautionary Statement
This release is for information purposes only and does not constitute a prospectus or any offer to sell or the solicitation of an offer to buy any security in the United States of America or in any other jurisdiction. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Notes will be offered in a private offering exempt from the registration requirements of the Securities Act and will accordingly be offered only to (i) qualified institutional buyers pursuant to Rule 144A under the Securities Act and (ii) certain non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act.  No indebtedness incurred in connection with any other financing transactions will be registered under the Securities Act. 
This communication is directed only at (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the “Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the Order,  (iii) are persons who are outside the United Kingdom, and (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any notes may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication relates will only be available to, and will only be engaged in with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.  
This announcement is not a public offering in the Grand Duchy of Luxembourg or an offer of securities to the public in any European Economic Area member state that has implemented Directive 2003/71/EC, and any amendments thereto (together with any applicable implementing measures in any member state, the “Prospectus Directive”). 
Forward Looking Statements
This release includes forward-looking statements within the meaning of the securities laws of certain applicable jurisdictions. These forward-looking statements can be identified by the use of forward-looking terminology, including, but not limited to, terms such as “aim”, “anticipate”, “assume”, “believe”, “continue”, “could”, “estimate”, “expect”, “forecast”, “guidance”, “intend”, “may”, “outlook”, “plan”, “predict”, “project”, “should”, “will” or “would” or, in each case, their negative, or other variations or comparable terminology.  These forward-looking statements include, but are not limited to, all statements other than statements of historical facts and include statements regarding Drax’s intentions, beliefs or current expectations concerning, among other things, Drax’s future financial conditions and performance, results of operations and liquidity, strategy, plans, objectives, prospects, growth, goals and targets, future developments in the markets in which Drax participate or are seeking to participate, and anticipated regulatory changes in the industry in which Drax operate. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward-looking statements are not guarantees of future performance and are based on numerous assumptions. Given these risks and uncertainties, readers should not rely on forward looking statements as a prediction of actual results. 

END

How space tech helps forests

20 April 2017

Sustainable bioenergy
Satellite view of the Earth's forests

Can you count the number of trees in the world? Accurately, no – there are just too many, spread out over too vast an area. But if we could, what would we gain? For one, we would get a clearer picture of what’s happening in our planet’s forests.

They’re a hugely important part of our lives – not only for the resource they provide, but for their role in absorbing carbon dioxide (CO2). So properly understanding their scale and what is happening to them – whether increasing or decreasing – and designing strategies to manage this change is hugely important.

The trouble is, they exist on such a vast scale that we traditionally haven’t been able to accurately monitor them en masse. Thanks to space technologies, that’s changing.

A working forest

The view from up there

As far back as World War II, aerial imaging was being used to monitor the environment. In addition to using regular film cameras mounted to aeroplanes to follow troops on the ground, infrared film was used to identify green vegetation and distinguish it from camouflage nets.

As satellite and remote sensing technology developed through the 20th century, so too did our understanding of our planet. Satellites were used to map the weather, monitor the sea, and to create topological maps of the earth, but they weren’t used to track the Earth’s forests in any real detail.

But in 2021 the European Space Agency (ESA) will launch Biomass, a satellite that will map the world’s forests in unprecedented detail using the first ever P-band radar to be placed in Earth orbit. This synthetic aperture radar penetrates the forest canopy to capture data on the density of tree trunks and branches. It won’t just be able to track how much land a forest covers, but how much wood exists in it. In short, the Biomass will be able to ‘weigh’ the world’s forests.

Over the course of its five-year mission, it will produce 3D maps every six months, giving scientists data on forest density across eight growth cycles.

The satellite is part of ESA’s Earth Explorers programme, which operates a number of satellites using innovative sensor technology to answer environmental questions. And it’s not the only entity carrying out research of this sort.

California-based firm Planet has 149 micro-satellites measuring just 10cm x 30cm in orbit around the Earth, each of which beams back around three terabytes of data every day. To put it another way, each satellite photographs about 2.5 million square kilometres of the Earth’s surface on a daily basis.

The aim of capturing this information is to provide organisations with data to help them answer the question: what is changing on Earth? When it comes to forests, this includes identifying things like illegal logging and forest fires, but the overall aim is to create a searchable, expansive view of the world that enables people to generate useful insights.

Rocket flying over the earth

Keeping the world green

All this data is not only vital for developing our understanding of how the world is changing, it is vital for the development of responsible, sustainable forestry practices.

From 2005 to 2015, the UN rolled out the REDD programme (Reducing Emissions from Deforestation and forest Degradation), which, among other functions, allows countries to earn the right to offset CO2 emissions – for example through forestry management practices. Sophisticated satellite measurement techniques not only let governments know the rate of deforestation or afforestation in their respective countries, it can also help them monitor, highlight and encourage responsible forestry.

Satellite technology is increasingly growing the level of visibility we have of our planet. But more than just a clearer view on what is happening, it allows us the opportunity to see why and how it is happening. And it’s with this information that real differences in our future can be made.