#AxeDrax: Not forests, communities, or the climate!
Drax is the single greatest emitter of carbon dioxide in the UK. In 2016, it competed with Aberthaw power station for being the UK’s top coal burning power station. And in February 2017, Drax acquired Opus Energy and the interests in four new gas power stations. Drax’s portfolio thus covers three types of dirty energy: Biomass, coal and gas.
Now it is also the biggest biomass power station in the world. Since 2015, Drax has been burning more wood annually than the UK produced in total every year
In return for trashing forests and digging up communities, Drax is receiving massive subsidies, when it should have been closed down years ago. Drax is cashing in on around £1.5 million in subsidies every single day. Meanwhile, subsidies for genuinely renewable and low carbon onshore wind and solar power are being slashed across the UK.
Drax’s biomass electricity counts towards the UK’s legal target of producing 15% of all energy used in this country from renewables by 2020. Yet in 2016, Drax burned the equivalent of much more than the UK’s entire annual wood production, to meet no more than 0.78% of the country’s total final energy demand
For forests, communities, and the climate, it’s time to #axedrax!
Contact us (biofuelwatch[at]gmail.com) to find out how you can help build the campaign to #axedrax .
Write to your MP now to call for an end to Drax’s subsidies for burning wood and coal. Urge her/him to push the Government to ensure that renewable energy subsidies only go to genuinely low-carbon and clean renewable energy, such as sustainable wind and solar power.
Download a flier about Drax.
On 13th April 2017, Biofuelwatch and our allies held three simultaneous protests during Drax’s Annual General Meeting: one in York, outside the AGM itself, one in London outside the offices of Drax’s two largest investors, and one at the Port of Liverpool where imported wood pellets arrive to be taken to burn at Drax Power Station. Check out these photos of all three protests; photos by Peter Marshall and Mark Kerridge of the London protest; and photos by George Brown of the York protest.
Read here about protests in October 2016 outside Drax Power Station and outside the Department for Business, Energy and Industrial Strategy, and view the short film accompanying those protests.
Watch this space or contact us to get involved in the next protests!
The information below can be downloaded as a briefing with full references, including full details on subsidy calculations [Note: An updated briefing reflecting the content of this webpage will shortly be uploaded.]
The power station consists of six units and Drax has converted three of them to burn only wood pellets. In 2016, Drax burned 6.6 million tonnes of pellets, made from 13.2 million tonnes of wood. By comparison, the UK’s total annual wood production is only 10.8 million tonnes.
Drax also burned 2.9 million tonnes of coal in 2016, putting it in the top two of UK coal burners, together with Aberthaw Power Station. The previous year, Drax’s coal-fired units had burned 6 million tonnes of coal and Drax makes it clear in its 2016 Annual Report that the only reason it burned less coal last year was the lower price for electricity. If the cost of electricity goes up once more, Drax can thus be expected to increase its coal-burning to as much as 6 million tonnes a year once again.
Since 2015, Drax has been burning more wood than the UK produces every year.
Drax shouldn’t be burning coal or biomass because of the huge impacts both have on communities, the environment, and the climate. Drax must be closed down instead. Without subsidies, Drax would be operating at a loss and would likely have to shut down.
Burning wood for electricity is no less disastrous for the climate than burning coal. Per unit of electricity, biomass emits more CO2 from smokestacks than burning coal does. Biomass supporters claim that this CO2 should be ignored because it will be absorbed by newly planted trees, but trees take decades to grow and minutes to burn. Clearcut forests may never be able or allowed to regrow. And when biodiverse forests are being clearcut and replaced with monoculture tree plantation, as is common in Drax main wood sourcing region, the southern US, carbon is irreversibly lost to the atmosphere. The real purpose behind Drax’s biomass conversion is to keep this old, dirty power station alive for longer and to cash in on massive public subsidies. Far from replacing coal, Drax’s partial conversion to biomass allows the power station to continue burning millions more tonnes of coal year in, year out.
In 2015, Drax was estimated to burn nearly one third of all globally traded wood pellets. Since November 2015, when E.On closed Ironbridge Power Station, Drax has been the only UK power station burning imported wood (though others are in the pipeline).
Most of the pellets burned at Drax are imported from the southern US, followed by imports from Canada and from the Baltic States. Drax has built two pellet mills: one in Louisiana and one in Mississippi. Between them, those will be able to produce just over one million tonnes of pellets a year from the end of 2017.
Furthermore, Drax has just acquired a large pellet mill development in Louisiana, which was commenced by the company German Pellets, which filed for insolvency in February 2016. The pellet mill will can currently produce 450,000 tonnes of pellets a year, but German Pellet had planned to expand it to a massive 1 million tonne capacity, which would require 2 million tonnes of wood annually[i]. Drax has also bid to acquire German Pellets’ second pellet mill in the US, based in Woodville, Texas, with a capacity of 500,000 tonnes of pellets a year. Interestingly, Drax’s biggest shareholder, Invesco Ltd, was the biggest debt-holder for those two mills.
Wood pellets from clearcut wetland forests in the southern US
Drax is by far the biggest customer of the controversial US pellet producer Enviva. Enviva has come under heavy criticism from US environmental NGOs for sourcing wood from clearcut coastal wetland forests.
Wetland hardwood forests in the southern US are amongst the most biodiverse forest and aquatic ecosystems worldwide outside the tropics. Just 20% of the vast hardwood wetlands forests once found in the region remain, and just 1.2 million hectares of this are ‘mature’ i.e. they have not been logged for the past 80 years. Enviva and Drax have built pellet mills within a sourcing area which includes mature hardwood forests and biodiversity hotspots.
See here for an investigation by US conservation groups Dogwood Alliance and NRDC (Natural Resources Defense Council) in December 2014, which shows how an Enviva pellet mill in North Carolina is sourcing wood directly from clearcut wetland forests. Pellets from that mill are being burned by Drax.
Enviva and Drax claim that they are only using ‘residues’, but in fact the majority of the wood from clearcuts commonly goes towards wood pellets – and it is unlikely that forest owners would be clearfelling entire forests without this demand. US groups have submitted a complaint against Enviva’s ‘misleading claims’ to the US financial regulator
Wood pellets from pine plantations in the southern US:
A proportion of Drax’s wood pellets is sourced from monoculture pine plantations in the southern US. Such plantations are being rapidly expanded across the region, at the expense of biodiverse native forests. Environmental campaigners from Dogwood Alliance visited Drax’s pellet mill in Massachusetts in 2015. They wrote: “Orderly rows as far as they eye can see like a cornfield, regular spraying of fertilizers and herbicides, and plantations are so quiet because they’re almost devoid of wildlife. Before they can grow into majestic trees, the heavy machinery chops them down like mowing a lawn. This is the commodification of nature and our forests. We chop down our native forests (in this case likely natural pine or mixed pine/hardwood forests) and destroy all the value these forests contained, replacing them with rows and rows of monoculture tree crops. Loblolly, slash and sand pine have replaced the dozens of species that used to call this region home.”
You can read more about the impacts of Drax’s pellet sourcing from the southern US on the Dogwood Alliance website and NRDC’s Our Forests Aren’t Fuel campaign page, and we’ve got more resources on biomass and the carbon impacts of it.
Even when Drax’s 50% conversion to biomass was almost complete, Drax still burned 6 million tonnes of coal in 2015. Thanks to low electricity prices, that figure fell to 2.9 million tonnes in 2016, but it could increase again in future. During 2016, 69% of Drax’s coal came from Colombia, 28% from opencast coal mines in the UK, and 2.8 from the US.
Drax’s Annual Report 2016 makes it clear that converting half its units to biomass has helped it by reduce its sulphur dioxide (SO2) and oxides of nitrogen (NOx) emissions and thereby comply with the EU Industrial Emissions Directive (IED), which came into force in 2016. Drax would have had to close down had it not complied with the IED. This is why, back in 2013, the Secretary of State for Business, Innovation and Skills at the time, Vince Cable, praised a Green Investment Bank loan to Drax by saying the power station “would have closed down because it has to meet European rules on coal use and it wouldn’t have been able to survive”Drax’s partial conversion to biomass has caused its emissions of small particulates (PM10) to increase, and those are linked to an increased risk of heart disease, strokes and breathing problems. Switching three units to biomass has thus not protected public health – it has simply helped Drax comply with legal requirements and to avoid closure and to continue burning large quantities of coal as well as wood.
Burning coal emits more carbon than other types of fossil fuels. But coal is also responsible for severe environmental, social and public health impacts that are connected with mining. Drax sources just under half of its coal from opencast mines in the UK, and the rest from imports, mainly from the US, Russia and Colombia. The key impacts are shown in detail in a 2016 report by the Coal Action Network.
In Colombia, villages have been evicted to make way for opencast coal mines, including the Cerrejón’ mine,one of the world’s largest.;The establishment of opencast coal mines in Colombia has been associated with militarisation and serious human rights abuses, including disappearances, massacres and assassinations. Today, more villages are facing eviction, freshwater is being polluted and depleted, and indigenous communities are going hungry as their food sovereignty is destroyed. Human rights abuses in Colombia due to conflict between communities and coal mining companies, have been extensively documented by many organisations over many years. See for example here and here.
Opencast coal mining– whether in the UK or elsewhere – has severe impacts on the local environment and landscapes, and on air quality and public health, due to the toxic coal dust. It also pollutes freshwater with toxins such as arsenic, chromium,and lead. In Scotland and elsewhere, companies are simply abandoning opencast mines when they are no longer profitable, without restoring the land, leaving a legacy of long-term pollution and environmental destruction behind.
In February 2017, Drax acquired Opus Energy and the interests in four new gas power stations. Each power station would have a capacity of 299 MW but would only be allowed to operate for 1,500 hours a year. This means that the combined capacity of the four plants would be equivalent to that of one 224 MW gas power station operating full-time. Two of the power stations already have planning consent: Hirwaun Power Station in Aberdare, near Merthyr Tydfil, and Progress Power Station at Eye Airfield Industrial Estate, Mid Suffolk. Full planning applications are pending for the other two: Abergelli Power station north of Swansea and Millbrook Power Station at Rookery Pit near Stewartby, Bedfordshire[i]. The power station will use Open Gas Cycle Turbines, which will make them less efficient than many other gas power stations, which uses Combined Cycle Gas Turbines.
Drax states in its 2016 Annual Report that it relies on future Capacity Market subsidies in order to build and operate those plants.
During 2016, Drax ‘earned’ £541 million in renewable electricity subsidies. That’s almost £1.5 million every day.;Renewable electricity subsidies are financed through a surcharge on electricity bills. During the same year, Drax’s profits after tax amounted to only £194 million. Without the subsidies, Drax would have accrued losses of £165.13m in 2016. The company’s 2016 Annual Report admits to a “reduction in profitability year on year”.
Clearly, Drax could not operate without biomass subsidies, and in future, Drax will be getting even more. On top of all of this, the Government has also awarded Drax a £22 million subsidy for burning coal in 2019/20 and a £27 million subsidy for coal burning in 2020/21. Drax could win similar annual coal subsidies until 2025.
Drax’s expected subsidies in 2017
These figures do not include subsidies that Drax’s pellet plants have been given in the US. Nor do they include a £50 million public loan guarantee granted by the Treasury, which states that the taxpayer will have to pay up if Drax defaults on a private loan of that amount.
Subsidising genuinely low-carbon, renewable energy such as sustainable wind and solar power makes a lot of sense. Using clean energy subsidies to pay for a power station that burns millions of tonnes of imported wood, pellets from clearcut biodiverse forests, and millions of tonnes of coal, is unacceptable! To make matters worse, the Government has been slashing support for onshore wind and solar power.
The Green Investment Bank (GIB) was set-up to help finance low-carbon projects, but its first big loan was given to Drax, which helped to seal the necessary finance for its biomass conversion. They initially loaned Drax £100 million, though Drax reduced that sum to £50 million after they procured an additional £50 million public loan guarantee from the Treasury. In effect, this loan has enabled Drax to avoid having to shut down and to continue burning both biomass and coal for the foreseeable future. This is the opposite of the type of green project that the GIB was set up to fund.
Then Business Secretary Vince Cable was quoted as having said that, without the conversion to biomass and the loan from the Green Investment Bank that helped to finance it, Drax “would have closed down because it has to meet European rules on coal use and it wouldn’t have been able to survive“. The GIB can therefore thank itself for being directly responsible for keeping the UK’s biggest polluter open and burning vast quantities of both biomass and coal.
The GIB has also funded other destructive big biomass projects (as well as unpopular waste incinerators) and continues to see biomass developments as a key part of their investment. Part of the problem is that, even though the GIB has 5 guiding green principles, their loans only have to adhere to one of them. So if government policy says that biomass is low carbon, evidence of forest and biodiversity destruction by the pellet industry isn’t enough to put the GIB off granting financial support.
Things could get far worse in future: The GIB has now been sold off to the Australian Macquarie Group, a major investor in fossil fuels. Macquarie also owns 50% of shares in MGT Power’s Teesside Biomass Plant, which will burn pellets made from 3 million tonnes of wood, most of them sourced from Drax’s main pellet supplier, Enviva. Enviva has been shown to source wood from clearcut biodiverse coastal wetland forests in the southern US. There are fears of many more investments in high-carbon, destructive projects such as Drax by the newly privatised GIB.
Drax is currently the only UK power station that has been (partially) converted to biomass. RWE and E.On previously converted Tilbury B and Ironbridge Power Station from coal to wood pellets, but both plants have been closed down, following major fires.
However, Lynemouth Power Station is also currently being converted to burning wood pellets. It had previously closed down, so once again, conversion to biomass won’t replace coal burning. Lynemouth Power Station was originally owned by Rio Tinto Alcan, who sold it to RWE. At the end of 2015, RWE sold it to a Czech energy company, Energetický a průmyslový holding (EPH). As a briefing by the climate NGO Sandbag shows, EPH is a privately-owned company without shareholders, which is buying some of the most controversial ‘assets’ from other energy companies, such as coal mines and coal power stations. EPH has entered into a sourcing agreement with Enviva, to supply up to 800,000 tonnes of wood pellets to Lynemouth Power Station. Lynemouth is expected to burn up to 1.7 million tonnes of pellets a year, made from 3.1 million tonnes of wood.