Tag: decarbonisation

3 ways decarbonisation could change the world

27 June 2017

Sustainable business

Mitigating climate change is a difficult challenge. But it’s one well within the grasp of governments, companies and individuals around the world if we can start thinking strategically.

On the behalf of the German government, The Internal Energy Agency (IEA) and the International Renewable Energy Agency (IRENA) have jointly published a report outlining the long-term targets of a worldwide decarbonisation process, and how those targets can be achieved through long-term investment and policy strategies.

At the heart of the report is a commitment to the ‘66% two degrees Celsius scenario’, which the report defines as, ‘limiting the rise in global mean temperature to two degrees Celsius by 2100 with a probability of 66%’. This is in line with the Paris Agreement, which agreed on limiting global average temperature increase to below two degrees Celsius.

Here are three of the findings from the report that highlight how decarbonisation could change the world.

The energy landscape will change – and that’s a good thing

Decarbonisation will by definition mean reducing the use of carbon-intensive fossil fuels. Today, 81% of the world’s power is generated by fossil fuels. But by 2050, that will need to come down to 39% to meet the 66% two degrees Celsius scenario, according to the report. But, this doesn’t mean all fossil fuels will be treated equally.

Coal will be the most extensively reduced, while other fossil fuels will be less affected. Oil use in 2050 is expected to stand at 45% of today’s levels, but will likely still feature in the energy landscape due its use in industries like petrochemicals.

Gas will likely also remain a key part of the energy makeup, thanks to its ability to provide auxiliary grid functions like frequency response and black-starting in the event of grid failure.

Renewables like biomass will likely play an increasing role here as well, particularly when combined with carbon capture and storage (CCS) technology.

Overall, renewable energy sources will need to increase substantially. In the report’s global roadmap for the future, renewables make up two thirds of the primary energy supply. Reaching this figure will be no mean feat – it will mean renewable growth rates doubling compared with today.

Everyday electricity use will become more efficient 

The report highlights the need for ‘end-use’ behaviour to change. This can mean everyday energy users choosing to use a bit less heat, power and fuel for transport in our day-to-day activities, but a bigger driver of change will be by investment in better, more efficient end-use technology – the technology, devices and household appliances we use every day.

In fact, the study argues that net investment in energy supply doesn’t need to increase beyond today’s level – what needs to increase is investment in these technologies. For instance, by 2050, 70% of new cars must be electric cars to meet decarbonisation targets.

Infrastructure design could also be improved for energy efficiency – smart grids, battery storage and buildings retrofitted with energy efficient features such as LED lighting will be essential. There’s also the possibility of increased use of cleaner building materials and processes – for example, constructing large scale buildings out of wood rather than carbon-intensive materials such as concrete and steel.

Decarbonisation will cost, but not decarbonising will cost more

The upfront costs of meeting temperature targets will be substantial. A case study used in the report estimates that $119 trillion would need to be spent on low-carbon technologies between 2015 and 2050. But it also suggests another $29 trillion may be needed to meet targets.

However, failure to act could mean the world will pay out an even higher figure in healthcare costs, or in other economic costs associated with climate change, such as flood damage or drought. Therefore, the sum for decarbonisation could end up costing between two and six times less than what failing to decarbonise could cost.

On top of this, the new jobs (including those in renewable fuel industries that will replace those lost in fossil fuels) and opportunities that will be created between 2015 and 2050 could add $19 trillion to the global economy. More than that, global GDP could be increased by 0.8% in 2050, thanks to added stimulus from the low carbon economy.

Achieving a cleaner future won’t be easy – it requires planning, effort, and the will to see beyond short-term goals and think about the long-term benefits. But as the report demonstrates, get it right and the results could be considerable.

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.

Why you shouldn’t be surprised by another record-breaking quarter for renewable energy

11 May 2017

Power generation
Field of solar panels shot from above

It’s been another record-breaking quarter for Britain’s power system. During the first three months of 2017, biomass, wind and hydro all registered their highest energy production ever, while solar recorded its highest ever peak output.

And while this is all worth celebrating, it shouldn’t come as a surprise – the last few years have seen Britain’s power system take several significant steps toward decarbonisation and this year is no different. Electric Insights, the quarterly report on Britain’s power system by Dr Iain Staffell from Imperial College London, commissioned by Drax via Imperial Consultants, documents the new gains and confirms the trend: renewables are fast becoming the new norm and in 2017 they continued their growth.

Biomass domes at Drax Power Station

The renewable record breakers

Over this quarter biomass electricity generation hit a record production figure of 4.4 TWh, which means that biomass generators ran at 95% of full capacity – higher than any other technology has achieved over the last decade.

Hydro went 4% better than its previous energy production best by generating 1.6 TWh, while Britain’s wind farms produced 11.3 TWh (10% higher than the previous record, set in 2015). This was helped in part by several new farms being built which increased installed capacity by 5% over last year, but it was also indebted to the mild, windy weather.

Wind farms produced more electricity than coal, 57 days out of 90 during the first three months of 2017

Solar hit a new record peak output at the end of March, when it generated 7.67 GW – enough to power a fifth of the country. In fact, during the last weekend of March, for the first time ever, the country’s demand for electricity from the national grid was lower during an afternoon than during the night. This was because solar panels, which only generate power when the sun is up, tend to sit outside of the national high voltage transmission grid.

Understanding how this happened is to understand how solar energy is changing our national power system.

A reverse of the trend

Electricity demand on the national grid – think of it as the power system’s motorways – is typically higher during the day and early evening (when people are most active, using lights and gadgets) than overnight. However, on the last weekend in March 2017, the opposite was true because of how much solar energy was generated.

Solar panels and some smaller onshore windfarms are ‘invisible’ – they don’t feed into the national grid. Instead, these sources either feed into the regional electricity distribution networks – the power system’s A and B roads – or, as many of them are on people’s roofs and used in their own homes or business premises, it never gets down their driveway. This can mean when solar panels are generating a lot of electricity, there is a lower demand for power from the grid, making it appear that less of the country is using electricity than it actually is.

This was the case during the last weekend of March, when solar generated enough power to satisfy a large part of Britain’s demand. And while this is another positive step towards a lower carbon energy mix, it is about to change the way our power system works, particularly when it comes to the remaining coal power stations.

What the power system needs to provide, today and in the future, is flexibility – to ramp up and down to accommodate for the shifting demand based on supply of intermittent – weather dependent – renewables. Thermal power stations such as gas, coal and biomass can meet much of this demand, but even more rapid response from technologies such as the Open Cycle Gas Turbines that Drax is developing and batteries could fulfil these needs quicker.

Today’s dirty is yesterday’s clean

The record breaking and increased renewable generation of the period from January to March 2017 would mean nothing if it wasn’t matched by a decrease in emissions. During the first three months of 2017, emissions dropped 10% lower than the same period in 2016 and a massive 33% lower than 2015. Coal output alone fell 30% this quarter compared to Q1 2016.

To put the scale of this progress into context we need only look at the quarter’s ‘dirtiest hour’ – the hour in which carbon intensity from electricity generation is at its highest. Between January and March, it peaked on a calm and cold January evening with 424 grams of CO2 released per kWh (g/kWh). The average for generation between 2009 and 2013 was 471 g/kWh. In short, this quarter’s dirtiest hour was cleaner than the average figure just four years ago – yesterday’s average is today’s extremity.

If we want to continue to break records and further progress towards a fully decarbonised power system, this needs to be a consistent aim: making the averages of today tomorrow’s extremes.

Top line stats

Highest energy production ever

  • Wind – 11.3 TWh
  • Biomass – 4.4 TWh
  • Hydro – 1.6 TWh

Record peak output

  • Solar – 7.67 GW
  • Enough to power 1/5 of the country

Yesterday’s average is today’s extremity

  • Average carbon emissions per kWh – 2009-2013
    • 471 g/kWh
  • Average carbon emissions per kWh – Q1 2017
    • 284 g/kWh
  • Peak carbon emissions per kWh – 2009-2013
    • 704 g/kWh
  • Peak carbon emissions per kWh – Q1 2017
    • 424 g/kWh

 

Explore the data in detail by visiting ElectricInsights.co.uk

Commissioned by Drax, Electric Insights is produced independently by a team of academics from Imperial College London, led by Dr Iain Staffell and facilitated by the College’s consultancy company – Imperial Consultants.

More power per pound

23 March 2017

Sustainable bioenergy

As the country moves towards a lower carbon future, each renewable power generation technology has its place. Wind, solar, hydro and wave can take advantage of the weather to provide plentiful power – when conditions are right.

Reliable, affordable, renewable power

But people need electricity instantly – not just when it’s a windy night or a sunny day. So, until a time when storage can provide enough affordable capacity to store and supply the grid with power from ample solar and wind farms, the country has to rely, in part, on thermal generation like gas, coal and biomass. Reliable and available on demand, yes. But renewable, low carbon and affordable too? It can be.

A year ago, a report by economic consultancy NERA and researchers at Imperial College London highlighted how a balanced mix of renewable technologies could save bill payers more than £2bn. Now, publicly available Ofgem data on which its newly published Renewables Obligation Annual Report 2015-16 is based reinforces the case for government to continue to support coal-to-biomass unit conversions within that technology mix. Why? Because out of all renewables deployed at large scale, biomass presents the most value for money – less public funding is required for more power produced.

Renewable costs compared

Drax Power Station’s biomass upgrades were the largest recipient of Renewable Obligation (RO) support during the period 2015-16. The transformation from coal to compressed wood pellets has made Drax the largest generator of renewable electricity in the country. And by a significant margin. Drax Power Station produced more than five times the renewable power than the next biggest project supported under the RO – the London Array.

Dr Iain Staffell, lecturer in Sustainable Energy at the Centre for Environmental Policy, Imperial College London, and author of Electric Insights, who has analysed the Ofgem data commented:

“Based on Ofgem’s Renewables Obligation database, the average support that Drax Power Station received was £43.05 per MWh generated. This compares to £88.70 per MWh from the other nine largest projects.”

“Biomass receives half the support of the UK’s other large renewable projects, which are all offshore wind. The average support received across all renewable generators in the RO scheme – which includes much smaller projects and all types of technology – is £58 per MWh. That is around £15 per MWh more than the support received by Drax.”

Ending the age of coal

Drax Group isn’t arguing for limitless support for coal-to-biomass conversions. And Drax Power Station, being the biggest, most modern and efficient of power stations built in the age of coal, is a special case. But if the RO did exist just to support lots of biomass conversions like Drax but no other renewable technologies, then in just one year, between 2015-16, £1bn of costs saving could have been made for the public purse.

Drax Power Station may be the biggest-single site recipient of support under the RO – but it does supply more low carbon power into the National Grid than any other company supported by Renewable Obligation Certificates (ROCs). In fact, 65% of the electricity generated at its Selby, North Yorkshire site, is now renewable. That’s 16% of the entire country’s renewable power – enough to power four million households.

Thanks to the support provided to Drax by previous governments, the current administration has a comparatively cost effective way to help the power sector move towards a lower carbon future. Biomass electricity generated at Drax Power Station has a carbon footprint that is at least 80% less than coal power – supply chain included. Drax Group stands ready to do more – which is why research and development continues apace at the power plant. R&D that the company hopes will result in ever more affordable ways to upgrade its remaining three coal units to sustainably-sourced biomass, before coal’s 2025 deadline.

Commissioned by Drax, Electric Insights is produced independently by a team of academics from Imperial College London, led by Dr Iain Staffell and facilitated by the College’s consultancy company – Imperial Consultants.

Taxing coal off the system

13 March 2017

Power generation

In the Spring Budget 2017, the Chancellor announced that the Government remains committed to carbon pricing. Philip Hammond’s red book revealed that from 2021-22 ‘the Government will target a total carbon price and set the specific tax rate … giving businesses greater clarity on the total price they will pay.’ Further details on carbon prices are to be ‘set out at Autumn Budget 2017’.

Researchers at Imperial College London have modelled what would have happened during 2016 with no carbon tax and also with an increased carbon tax. They have compared both with what actually happened. Their conclusion?

No carbon tax would mean:

  • More coal
  • Less gas
  • Higher emissions.

A higher carbon tax would mean:

  • Less coal
  • More gas
  • Lower emissions

Since it was announced in 2011, the Carbon Price Support (CPS) has encouraged generators and industry to invest in lower carbon and renewable technologies. It has also forced coal generators to fire their boilers only when they are really needed to meet demand, such as during the winter months or at times of peak demand and still or overcast weather conditions during the summer months.

The introduction of the carbon price has meant that gas power stations, which are less carbon intensive than coal, have jumped ahead of coal in the economic merit order of energy generation technologies and produced a greater share of the UK’s power. The same is the case for former coal generation units that have since upgraded to sustainable biomass – three such units at Drax Power Station result in savings in greenhouse gas (GHG) emissions of at least 80%.

A coal cliff edge?

The Carbon Price Support has resulted in significant savings in the country’s greenhouse gas emissions, helping the UK meet its international climate change commitments. Removing or reducing the CPS too soon and Britain’s power mix risks going back in time. It would improve the economics of coal and encourage Britain’s remaining coal power stations to stay open for longer creating a risk to security of supply through a ‘cliff edge’ of coal closures in the mid-2020s. Changing the economics to favour coal also makes it harder to reach the UK government’s goal of bringing a new fleet of gas power stations online.

What if …

Dr Iain Staffell from the Centre for Environmental Policy at Imperial College London has modelled a scenario in which the Carbon Price Support did not exist in 2016. “If the government had abolished all carbon pricing, we would probably have seen a 20% increase in the power sector’s carbon emissions,” said Staffell.

“Removing the Carbon Price Support would have the equivalent environmental impact of every single person in the UK deciding to drive a car once a year from Land’s End to John o’Groats.”

Without the Carbon Price Support, emissions from electricity consumption would be 20% higher, meaning an extra 250 kg per person (equivalent to driving a car 800 miles).

Running the numbers

The Carbon Price Support is capped at £18/tCO2 until 2021. In his Budget on 8th March 2017, Chancellor Philip Hammond – rightly, in the view of Drax – confirmed the government’s commitment to carbon pricing. Using data from National Grid and Elexon and analysis from Dr Iain Staffell, Electric Insights shows how coal power generation was only needed last winter when electricity demand was greater than could be produced by other technologies alone. Coal was only used at times of peak demand because it was among the most expensive energy technologies, in part due to the CPS.

What if that wasn’t the case and the government had decided to scrap the CPS before that point in time? More coal is burnt, particularly during the daytimes – on average coal produces 2,500 MW more over this week (equivalent to four of Drax Power Station’s six generation units).

And what does Dr Iain Staffell’s model suggest would have happened if the cap was doubled to £36/tCO2? The change is stark. Even for a week in the winter, with an average temperature across the country of 8.6oC, to see coal generation reduced so much compared to the actual CPS of £18/tCO2 or the £0/tCO2 scenario model, illustrates the impact of the Carbon Price Support.

Could bill payers save?

One argument for reducing the Carbon Price Support – or scrapping it altogether – is the possibility that consumers and non-domestic electricity bill payers would save money. It’s worth noting that apparent savings for electricity bill payers are lowered when the whole way that power is priced is accounted for, by the time it reaches homes and businesses.

“Carbon price support does increase the cost of wholesale power,” says Staffell. “But if you add the extra taxes, other renewable and low carbon support measures, transmission and balancing charges and fees imposed by electricity suppliers, the overall impact on consumer bills is modest. So, if the government abolished all carbon pricing, we could expect a 1 p/kWh reduction in our tariffs, but a 21% increase in our carbon emissions.”

As a report by economic consultancy NERA and researchers from Imperial College London has already shown, there are other ways to save bill payers money, while encouraging a low carbon future. Their analysis published in early 2016 found that households and businesses could save £2bn if the government considered the whole system cost of electricity generation and supply when designing its competitions for support under its Contracts for Difference (CfD) scheme.

2016, redux

Without the Carbon Price Support, the UK wouldn’t have managed to send carbon emissions back to 19th century levels.

So if 2016 was played out one more time but with no Carbon Price Support:

  • Coal generation would have increased by 102% (28 terawatt-hours) to 56 TWh
  • Gas generation would have decreased by 21% (-27 TWh) to 101 TWh
  • Carbon emissions would have risen by 21% (16 million tonnes of carbon dioxide) to 92MT CO2
  • The carbon intensity of the grid would have increased by 20% from 290 gCO2/kWh to 349 gCO2/kWh

And if 2016 had seen a doubling of the CPS to £36/tCO2:

  • Coal generation would have decreased by 47% (-12.9 TWh) to 14.7 TWh
  • Gas generation would have increased by 9% (11.8 TWh) to 139.5 TWh
  • Carbon emissions would have decreased by 10% (7.3 MT CO2) to 68.6 MT CO2
  • The carbon intensity of the grid would have decreased by 9% from 290 gCO2/kWh to 263 gCO2/kWh

The two scenarios presented above only modelled the impact of no or a higher Carbon Price Support on nuclear, coal and gas power supply. In the real-world, changes to the Carbon Price Support would also impact on energy technologies that operate under the Renewables Obligation (RO) such as two of Drax’s three biomass units and much of the country’s other renewable capacity. CPS changes would also likely impact imports and storage.

While no analysis is perfect this clearly illustrates the significantly negative impact that scrapping or reducing the Carbon Price Support would have on the UK’s decarbonisation agenda. It also highlights the benefits that the government’s decision to remain committed to carbon pricing will deliver.

Commissioned by Drax, Electric Insights is produced independently by a team of academics from Imperial College London, led by Dr Iain Staffell and facilitated by the College’s consultancy company – Imperial Consultants.

The biomass carbon story

Matthew Rivers, Director of Corporate Affairs, Drax, Group Special Advisor

23 February 2017

Sustainable bioenergy

There is an important difference between carbon dioxide (CO2) emitted from coal (and other fossil fuels) and CO2 emitted from renewable sources. Both do emit CO2 when burnt, but in climate change terms the impact of that CO2 is very different.

To understand this difference, it helps to think small and scale up. It helps to think of your own back garden.

One tree, every year for 30 years

Imagine you are lucky enough to have a garden with space for 30 trees. Three decades ago you decided to plant one tree per year, every year. In this example, each tree grows to maturity over thirty years so today you find yourself with a thriving copse with 30 trees at different stages of growth, ranging from one year to 30 years old.

At 30 years of age, the oldest has now reached maturity and you cut it down – in the spring, of course, before the sap rises – and leave the logs to dry over the summer. You plant a new seedling in its place. Through the summer and autumn the 29 established trees and the new seedling you planted continue to grow, absorbing carbon from the atmosphere to do so.

Winter comes and when it turns cold and dark you burn the seasoned wood to keep warm. Burning it will indeed emit carbon to the atmosphere. However, by end of the winter, the other 29 trees, plus the sapling you planted, will be at exactly the same stage of growth as the previous spring; contain the same amount of wood and hence the same amount of carbon.

As long as you fell and replant one tree every year on a 30-year cycle the atmosphere will see no extra CO2 and you’ll have used the energy captured by their growth to warm your home. Harvesting only what is grown is the essence of sustainable forest management.

If you didn’t have your seasoned, self-supplied wood to burn you might have been forced to burn coal or use more gas to heat your home. Over the course of the same winter these fuels would have emitted carbon to the atmosphere which endlessly accumulates – causing climate change.

Not only does your tree husbandry provide you with an endlessly renewable supply of fuel but you also might enjoy other benefits such as the shelter your trees provide and the diversity of wildlife they attract.

Mushroom - Brown cap boletus in autumn

No added carbon

This is a simplified example, but the principles hold true whether your forest contains 30 trees or 300 million – the important point is that with these renewable carbon emissions, provided you take out less wood than is growing and you at least replace the trees you take out, you do not add new carbon to the atmosphere. That is not true with fossil fuels.

It is true that you could have chosen not to have trees. You could instead build a wind turbine or install solar panels on your land. That would be a perfectly reasonable choice but you’ll still need to use the coal at night when the sun doesn’t shine or when the wind isn’t blowing. Worst of all you don’t get all the other benefits of a thriving forest – its seasonal beauty and the habitat that’s maintained for wildlife.

Of course, the wood Drax needs doesn’t grow in our ‘garden’. We bring it many miles from areas where there are large sustainably managed forests and we carefully account for the carbon emissions in the harvesting, processing and transporting the fuel to Drax. That’s why we ‘only’ achieve more than 80% carbon savings compared to coal.

Chief Executive comments on full year results

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

16 February 2017

Investors

We are playing a vital role in helping change the way energy is generated, supplied and used as the UK moves to a low carbon future.

With the right conditions, we can do even more, converting further units to run on compressed wood pellets. This is the fastest and most reliable way to support the UK’s decarbonisation targets, whilst minimising the cost to households and businesses.

In a challenging commodity environment Drax has delivered a good operational performance with 65% renewable power generation.

 

The acquisition of Opus Energy and rapid response open cycle gas turbine projects are an important step in delivering our strategy, diversifying our earnings base and contributing to stronger, long-term financial performance across the markets in which we operate.

Related documents:

Decarbonisation: the next step

Andy Koss, CEO Generation until April 2020

19 December 2016

Opinion
Turbines spinning

Half a decade ago we began a major transformation at Drax Power Station converting it to run on sustainable biomass. This week we’ve reached another milestone in that journey.

We’ve been granted a contract for difference (CfD), a UK government financial support that’s now been approved by the European Commission. It allows us to fully convert a third power generation unit to run entirely on compressed wood pellets, a form of renewable biomass. The granting of the CfD is a symbolic moment in our decarbonisation journey – it marks the close of one phase of development where the power station now makes more renewable than fossil fuel power, and the start of the next.

This next chapter began when we announced two major projects: the acquisition of Opus Energy and our plans to build four new rapid response, open cycle gas turbine (OCGT) power stations.

Like the upgrade of Drax Power Station, these new peaking plants are an important step in helping the country achieve a decarbonised energy system. They will do this by enabling more renewables to come onto the system.

The need for a diverse power network

Nearly 45% of the UK’s power already comes from gas, mostly generated by combined cycle gas turbine (CCGT) power plants. But while CCGT plants can deliver a steady supply of baseload power and flex up and down within seconds – just like Drax Power Station does with both coal and biomass – they can’t turn on and be at full capacity at very short notice. Starting from cold to quickly power the equivalent of a small city in a matter of minutes rather than hours or days, however, is exactly what the UK power network is increasingly going to need.

Solar and wind power can’t generate electricity when it’s dark or still. So to facilitate more of these intermittent renewables coming onto the grid, we need sources that can be quickly ramped up to ‘fill the gaps’ when lower carbon technologies aren’t able to provide the essential power for the modern world. This is where OCGT stations come in, alongside other standby technologies such as storage and demand side response.

OCGT stations have turbines that work like jet engines. This means they can start up incredibly quickly, getting to full load in just 30 minutes, meeting surges quickly when intermittent renewables can’t and nuclear, biomass and CCGT power stations are already providing baseload electricity.

Our proposed plants could be online as soon as the winter of 2020/21 – a few years before the last remaining coal-fired power stations close down. They will operate for roughly 500 hours a year (with a maximum availability of 1,500 hours depending on demand) and each will have a capacity of 299 MW. Each will generate enough instant power to simultaneously boil 120,000 kettles.

As well as allowing more renewables onto the system these gas plants support the government’s vision for reducing the carbon intensity of our energy grid – gas has half the carbon footprint of coal. More than that, we have expertise in it.

Drax CEO, Dorothy Thompson, has developed and operated 3,160 MW of gas assets in the past for Intergen, while a number of our engineers have worked across development, construction and operation of gas projects. We trade in it, too, so we know the market well. In short, a move into gas is one we are well suited too.

Drax Power CEO Andy Koss in a hard hat standing in front of a Drax biomass train

A secure economic future

Thanks to capacity market contracts, our OCGT plants will have limited reliance on income from the energy markets in the future. The capacity market is a government scheme designed to boost the UK’s energy security. It does this by paying new and existing power plants a fixed price to be available to generate electricity in future winters, the time of the year when demand is at its highest. The price they are paid is determined by a competitive auction, which allows government to secure as much capacity as it needs at the lowest price possible.

Building new power stations requires substantial investment, so having fixed-price contracts for power allows generators – like us – and their shareholders to invest in low carbon projects , safe in the knowledge that it will be economical to do so.

We’re aiming to secure 15-year capacity contracts for one OCGT in England and one in Wales within the next two years. In the most recent capacity auction , the price was driven too low to justify a commitment to build the first two plants. This doesn’t mean development on the plants will stop. Critical development work will continue throughout 2017 and next December the plants will be re-entered into the competition.

Continued commitment to biomass

Our new power stations mark a new chapter for Drax Group, but what they don’t affect is our commitment to biomass. Drax Power Station is already generating a majority of its electricity using high density wood pellets. And the granting of the CfD means we can now finalise the coal-to-biomass upgrade of half of the UK’s biggest power station and continue to invest in these assets. With the right support, we stand ready to complete the conversion of our North Yorkshire site and run entirely on sustainably-sourced biomass.

A study from engineering and design company Arup found that, after onshore wind, converted biomass power plants are the most affordable large-scale renewable power solution in the UK. More than that, the costs of undertaking this conversion have come down over the last few years. However, there is still room to bring this cost down further and we believe this needs to happen before we can fully convert Drax Power Station.

We are as determined to achieve this as we have ever been. Our view has always been to ensure we provide power for a brighter future and our new power stations are the next step in doing this.

Renewables: better together

Andy Koss, CEO Generation until April 2020

5 April 2016

Opinion

There’s more pressure than ever to reduce carbon dioxide emissions from electricity generation. And no one is keener than the team here at Drax Power Station to make it happen. In fact, we’ve been doing it for a decade. But we need the right support to finish the job.

  • We upgraded our turbines between 2007-12 to save one million tonnes of CO2 emissions.
  • We’ve converted half our station to run on compressed wood pellets instead of coal – reducing emissions by up to 86 per cent.
  • Our friends in the North of England have invested millions of pounds to help us make that happen, through building new infrastructure at our landing and loading facilities at the Port of Tyne, the new port at Liverpool, at Hull and at Immingham.
  • We’ve designed and commissioned our own rolling stock with Lloyds Register Rail to ensure that the compressed wood pellets can be transported to the power station in the most energy-efficient way possible.

And while many jobs in the North of England are being lost with the planned closure of a number of older coal-fired power stations, we continue to employ over a thousand people directly here in North Yorkshire.

In fact, it’s no exaggeration to say that Drax is a genuine Northern Powerhouse, to borrow a phrase from the Chancellor of the Exchequer.

Which is why we hope he and his colleagues in Government will listen when we say that we’re seriously concerned that the planned auctions for new green energy could result in bill payers missing out on savings of over £2 billion.

The Government has committed to three further renewable energy auctions that will happen over the next few years. The first of them is already planned for later in 2016.

As far as we know, those auctions will only be open to offshore wind and perhaps also something being referred to as ‘less established technologies’.

But independent research published by NERA and Imperial College London suggests that a ‘single technology’ approach could waste a significant amount of money.

The research was commissioned by Drax to establish the ‘true’ cost of the main renewable energy technologies – wind, solar and biomass.

As a result, economists conclude that hard working families and businesses could enjoy significant savings if these auctions were opened up to include other renewables.

But the sun doesn’t always shine and the wind doesn’t always blow. This makes wind and solar intermittent energy technologies. Backup power is needed when the weather’s not right or when demand is high.

Naturally, this standby energy isn’t free. Someone has to pay for it.

But those additional costs are not currently included in the way that the Government calculates how much support the different kinds of renewable energy require.

And the ICL/NERA research shows that when the true costs are added in, offshore wind is actually the most expensive form of renewable energy.

The affordable solution is to convert existing power stations to use compressed wood pellets in place of coal. This balanced approach also allows more offshore wind and solar onto our electricity network without the need for more fossil fuels to provide overall reliability. More biomass conversions can also help the UK end coal by Energy Secretary Amber Rudd’s 2025 target date.

That’s what we mean when we say Drax needs the right support to finish the job. We’re asking the Government to consider the true cost of bringing new renewable capacity on stream. And then to add sustainable biomass to the auctions for new contracts.

That decision could save bill payers up to £2bn. It could safeguard thousands of direct and indirect jobs in Yorkshire and the North of England. And it will give our country the reliable, renewable power we need when others just can’t deliver it.