Drax discusses future plans during investor presentation

By Anna Simet | July 20, 2017

Reducing the cost of wood pellet production, finishing two capacity expansions and overhauling a recently acquired plant are just a few of the many focuses Drax CEO Dorothy Thompson discussed during the company’s recent investor presentation to discuss half-year result for six months ending June 30.

Currently, Drax generates 68 percent of its energy from biomass. During the first half of the year, it produced a total of 10.7 terawatt-hours (TWh), 7.3 TWh of which was from biomass. Thompson said the three wood pellet-fired units that Drax has converted from coal power have had good availability, and that Drax’s biomass supply chain is “working very well.”

Drax is in the process of evaluating the conversion of a fourth unit to biomass, and trials to date have been promising, according to Thompson. “We’re confident that we can run that unit safety, and confident that we can produce high output levels with good levels of efficiency, but the challenge we have is doing so in a reliable and sustainable basis, and that’s the thing we have not yet managed to prove,” she said. “We know we have to put in further modifications to deliver that.”

Trials will cease over the winter and the unit will resume burning coal, Thompson said, but a major maintenance project scheduled for next year will involve further modifications, followed by a continuation of the biomass trial. “Were very hopeful…we’ll make progress on the reliability challenge of this unit,” she said, adding that Drax is continuing to work on reducing the cost of biomass technology, both the cost of making pellets cost and finding less expensive conversion solutions, such as the work being done on the fourth unit.

Drax is forging ahead to meet its goal of a 30 percent self-supply of wood pellets, with two expansion projects at Drax’s Amite and Morehouse facilities—for a collective increase in capacity of 250,000 metric tons— and both are expected to be complete by the end of the year, Thompson said. And, the former German Pellets Louisiana plant, which Drax purchased earlier this year for $35 million and has renamed LaSalle Bioenergy, will add 450,000 tons annually to Drax’s overall capacity. The facility is undergoing $26 million in upgrades that Thompson said would “meet our safety and operation standards.”

Drax expects to bring that plant online starting in 2018, reaching full production by the end of 2019, according to Thompson. She said Drax is continuing to evaluate opportunities for additional acquisitions.