Drax plans to boost annual wood pellet capacity to 5 million tons

By Erin Voegele | November 20, 2019

Drax Group plc released a trading statement on Nov. 19 announcing the company plans to have 5 million metric tons of annual pellet capacity in place by 2027. The increased capacity is expected to help reduce biomass costs.

Drax, through its Drax Biomass subsidiary, currently has 1.5 million metric tons of wood pellet capacity in place. In its 2019 half-year results, the company announced plans to boost capacity by 350,000 metric tons at its three existing U.S. pellet plants over the next two years. Drax now says it is also evaluating options to develop an additional 3 million tons of capacity over the next seven years.

In the statement, Drax said it remains focused on opportunities to reduce its cost of biomass to a level that is economical without subsidy in in 2027. “These savings will be delivered through further optimization of existing biomass operations and greater utilization of low-cost wood residues; an expansion of the fuel envelope to incorporate other renewable fuels and; a significant expansion of self-supply capacity,” the company said in the statement.

According to Drax, the planned expansion in biomass capacity would allow it to develop an unsubsidized biomass generation business by 2027, with the option to service wood pellet demand in other markets, such as Europe, North America and Asia.

The trading notice also indicates Drax completed major planned outages on two biomass units last summer. Following a delayed return to service, the company said it plans to run all four renewable obligation certificate (ROC) units at high utilization levels during the fourth quarter of 2019.