UK’s Drax to invest up to $12.5 billion in US biomass power plants
By Susanna Twidale
LONDON, Sept 24 (Reuters) -British power generator Drax DRX.L could invest up to $12.5 billion developing biomass plants with carbon capture and storage (BECCS) in the United States over the next decade, it said on Tuesday.
Drax, which generates around 6% of Britain's electricity, said it is still committed to the UK but sees opportunities in the U.S. for its BECCS technology.
Its new Houton-based business, Elimini, is reviewing more than 20 potential sites for BECCS projects and has around 100 staff.
Elimini plans to have its first U.S. project up and running by the end of 2030 which will require a $2.5 billion investment, Elimini Executive Chair and Drax Group CEO Will Gardiner told Reuters.
"We are aiming to do more over the next decade," he said.
The company said that, as well as the BECCS plant capturing the emissions it creates by burning pellets, the absorption of greenhouse gases during the growth of the wood means its overall impact will be carbon negative, enabling it to generate carbon removal credits.
Many companies have set net zero emissions targets which require them to purchase carbon credits to compensate for the emissions they are unable to cut themselves.
Some corporate giants such as Microsoft have said they are willing to pay a premium for removal credits, which take carbon emissions out of the atmosphere.
Drax said it had already entered 11 carbon removal deals with eight companies.
Green groups have criticised the practice of biomass power generation, arguing that it is not a carbon-neutral method of energy generation and that pellet production can contribute to deforestation.
Drax says it only uses wood residuals or byproducts from trees primarily used for lumber and that demand for wood from sustainable forests can help to increase forest growth.
($1 = 0.7473 pounds)
Reporting By Susanna Twidale
Editing by Christina Fincher
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
