Rail boost for Drax as it gets ready to push £135m ‘pellet port’ to the limit
27th February 2017
RAIL links between Immingham's world-leading biomass handling facility and power giant Drax have been radically improved in a year that saw it tip the balance from coal to renewables.
Improving the pellet supply chain, from increases in profitability at US plants to streamlining the UK reception and onward movement, have been major strides that have helped mitigate a 17 per cent reduction in earnings for 2016.
The energy giant, with half of its throughput now coming through the North East Lincolnshire port, went from 43 per cent renewable feedstock in 2015 to 65 per cent last year, as the £700 million transformation plan completed.
Drax's investment to switch three of the six huge units from coal to biomass has been hit on budget, it reported.
Now bosses are looking to push the huge £135 million Immingham investment to the limit as they look to secure a total plant conversion in the coming years, as an end to coal generation is expected in 2025.
The eight skyline changing silos, automated conveyor systems, rail transfer stations and state-of-the-art
Andy Koss, chief executive at Drax Power, said: "We are building a really good working relationship with ABP. The Immingham terminal is half the volume, half the throughput capacity, and what we are really seeing – now we have three units on biomass – is the supply chain kick on. We have six million tonnes of throughout capacity a year at Immingham, what we are looking at is pushing that to the limit, to see if we can hit the theoretical limits."
It is being aided by work with several partners on the rail journey time. Less than 50 miles by road to the power station, which sits between Selby and Goole, the purpose-built wagons were initially taking four hours on the track. "It was all about freight lines, slow running and stress points," Mr Koss said. "We have done a lot of work with GB Freightliner, DB Schenker and Network Rail, and we have got this down to two hours. Turning around the sets more quickly really helps the supply chain."
Annual results, released yesterday, saw earnings returned of £140 million, down from £169 million in 2015.
Challenging commodity markets were blamed, together with Levy Exemption Certificates, previously issued to renewable energy providers until 2015.
Drax continues to make the case for the renewables source being "the fastest and most reliable way to support the UK's decarbonisation targets".
And Mr Koss hinted it could bring further investment to Immingham, where coal accounts for a further one million tonnes.
"We do say it a lot to Government, they know where we stand, we would like to convert the rest of the plant to biomass, and that would have a big impact on the supply chain," he said. "We have 12 million tonnes of throughput at four ports, we may need a little bit more if we convert all six. It is a really positive message from Drax, for the region, and it sits with the Government's Industrial Strategy."
The commitment to push the ports has been welcomed by ABP.
Dafydd Williams, head of communications on the Humber, said: "ABP has invested around £135 million over the last three years at our Renewable Fuels Terminal in Immingham as part of our work with Drax.
"The terminal is now constantly busy and we are immensely proud of the role ABP helps to play to keeping the lights on for homes and businesses across the country. We are committed to plans to grow the energy sector across the Humber and doing all we can to help such business to flourish in the coming years."
News courtesy: www.humberbusiness.com