Drax has agreed a £19.4 million deal to buy out a remaining stake in two US pellet plants acquired last year.
The biomass-firing power giant bought Pinnacle Renewable Energy last April, with Two Rivers Lumber Co owning a 10 per cent minority interest in Alabama Pellets, a joint venture that formed part of the transaction.
It is the company that oversees the Aliceville and Demopolis pellet plants in the southeastern US state. Aliceville, commissioned in 2018, has a nameplate production capacity of 300,000 tonnes per year. Demopolis, commissioned earlier this year, and co-located with a Two Rivers sawmill, has a nameplate production capacity of 360,000 tonnes.
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The company said the acquisition - for $22 million - will provide Drax with “net economic control over a further 66,000 tonnes of sustainable biomass production capacity per annum, rights over land associated with Demopolis and extend long-term fibre supply arrangements”. The deal is expected to complete this month.
It comes as Drax strongly refutes claims challenging the sustainability of operations in Canada. Bosses at the North Yorkshire plant said they are considering legal action against the BBC following the airing of an episode of Panorama that examined forestry work in British Columbia - billed as The Green Energy Scandal Exposed.
In response to accusations of logging of primary forest for pellet production, Drax said it is “open and transparent about operations” and that since becoming aware of the production team’s visit to Canada, “many people across our business have collectively spent hundreds of hours engaging with them in an effort to encourage an accurate portrayal of our business and the wider forestry industry”.
It said: “As anyone in the BC forestry industry knows, the forests there are not harvested for biomass, they are harvested for high value timber used in construction. 80 per cent of the material used to make our pellets at Drax in Canada is sawmill residues – sawdust, wood chips and bark left over when the timber is processed. The rest is waste material collected from the forests which would otherwise be burned to reduce the risk of wildfires and disease. “This is the material used by Drax to produce 12 per cent of the UK’s renewable and secure electricity, playing a vital role in keeping the lights on for millions of homes and businesses.”
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