On the sugar plantations of America’s southern states, Will Gardiner hopes he may have found an answer to some of the UK’s power needs – and his company’s survival. The American boss of FTSE 250 power generator Drax has made several trips to Louisiana to investigate whether bagasse – a residue from sugar cane – could help fuel Drax’s power station in North Yorkshire more cheaply than the sawdust and tree thinnings that have replaced coal in four of its six turbines. His trips are urgent: the giant power station, which supplies up to 6% of the UK’s electricity, is dependent on subsidies that will end in 2027. While coal plants have been closing apace, Drax has clung on by swapping to wood chips. That may not last. The finite subsidies bring the business some £800m a year – a fifth of its £4.2bn revenue. One of its turbines is guaranteed £100 per megawatt hour (MWh), well above the current electricity wholesale price of £35 per MWh. “Biomass has a long-term role to play,” insists Gardiner, the former finance chief promoted to chief executive at the start of 2018, “but it has to be economically viable”. To survive, Drax is aiming to cut the cost of its biomass generation from £75 per MWh to £50, by cutting supply chain costs and, possibly, using the Louisiana bagasse.
Times 15th Sept 2019 read more »