Drax takes action to secure UK power supply this winter

Drax on July 6 announced it is continuing to optimize its biomass generation and logistics and will temporarily extend the life of its coal generation assets in response to increased pressure on European gas markets and associated concerns regarding the electricity supply in the U.K. this winter.

In order to optimize its biomass generation and logistics, Drax said it is reprofiling biomass generation and supply from the summer to the winter, enabling the company to provide high levels of renewable electricity generation in the U.K. throughout the winter when demand is likely to be higher.

Separately, the U.K. government has asked owners of legacy coal-fired generation assets to work with the National Grid to temporarily extend the life of their coal generation assets to March 2023. Due to this government request, Drax said it has entered into an agreement with National Grid under which its two coal-fired units at Drax Power Station will remain available to provide a “winter contingency” service to the U.K. power system from October 2022 through the end of March 2023. Drax explained that the two coal-fired units will not generate commercially for the duration of the agreement. Rather, they will only operate if and when instructed to do so by the National Grid. Under the terms of the agreement, Drax will be paid a fee for the service and compensated for costs incurred, including coal costs, in connection with the operation of the coal units in accordance with the agreement.

Drax ended commercial operations on its two remaining coal-fired generation units in March 2021. Formal closure of the units was planned for September 2022. According to Drax, the limited six-month extension is not expected to result in a material level of coal generation.

Drax also indicated that the six-month extension is not expected to impact the timing of a final investment decision or intended commissioning date for the company’s proposed bioenergy carbon capture and storage (BECCS) project. Drax continues to expect to make a final investment decision on the BECCS project in 2024.