Released November 04, 2008 | BANGALORE, INDIA
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Drax Power Limited, the principal subsidiary of Drax Group plc (LSE:DRX) (Selby, United Kingdom), has announced plans to invest about $3.3 billion to set up three biomass-fired power stations with a capacity of 300 megawatts (MW) each. The amount includes investments required to set up processing facilities and supplementary biomass logistics. The project will be undertaken in a joint venture with Siemens AG (NYSE:SI) (Munich, Germany).
After execution of the financing and construction contracts, work on the first plant is expected to begin in 2010, and this plant is expected to start operating from 2014. With the completion of the three plants, Drax aims to supply at least 10% of the U.K.'s total electricity and 15% of the country's renewable energy. The plants will provide the U.K.'s electricity market with baseload generation capacity. Drax currently operates the country's largest coal-fired power plant in Yorkshire in northern England. The company has also started using biomass in the fuel mix for this 4,000 MW power plant. Drax already has a biomass business management team, and it purchases large quantities of biomass from all over the world. The biomass is made up of ingredients such as sunflower seeds, peanut husks, straw and forest residue.
Drax has announced changes to its dividend distribution policy to finance its biomass business. During 2008 and 2009, all excess cash will be distributed, and any proceeds from refinancing deals will be used to finance the company's equity investment in the biomass business. From 2010 onwards, the company will aim for a payout ratio of 50% of underlying earnings.
Siemens Project Venture GmbH will construct the three new biomass plants for Drax, while Drax will manage and operate the business. Under the joint venture agreement, Drax will own 60% of the business. The plants will use Siemens' turbine technology, and Drax will procure the necessary biomass. Rights to port sites at Hull and Immingham have already been obtained, and efforts to procure the third site are in progress. Land at the Drax Power Station is also being considered as a viable option. Selection of the port sites indicates that a large part of the biomass will be shipped in. Drax, however, has not commented on the quantity of biomass that will be imported. It has admitted that building up a local stock would require some time.
In an effort to emphasize its commitment to reduce its carbon-dioxide (CO2) emissions, Drax recently undertook two major initiatives. The first involves the modernization of all the turbines at its Yorkshire power station. The installation of the upgraded high-pressure and low-pressure turbines, when completed, will help Drax reduce its CO2 emissions by 1 million tons per year. The second initiative is to generate at least 10% of its power from renewable sources by 2009. That will help Drax reduce its CO2 emissions by another 2 million tons per year.
In May 2008, Drax announced plans to reduce its coal consumption by using biomass. It had outlined an $83 million project to replace 10% of its coal with biomass. Alstom SA (EPA:ALO) (Levallois-Perret, France) will set up a biomass-processing plant and supply Drax with the necessary fuel. The biomass co-firing plant will have a capacity of 1.5 million tons per year and will be set up at the existing power station site. The first phase of the plant is expected to be operational from 2009. The biomass co-firing project is set to generate 400 MW of power by mid-2010 and thus become the world's largest biomass co-fired project. The project is part of the company's aim to reduce its carbon emissions by at least 15% in 2011.
Drax recently signed an $18 million engineering, procurement and construction contract with Doosan Babcock Energy Limited (Crawley, United Kingdom) under which Doosan Babcock will supply direct injection biomass co-firing systems to the six coal-fired power units at the Drax Power Station. The biomass co-fired facility will help Drax further reduce its CO2 emissions by more than 2.5 million tons per year.
View Project File - 78000423 78000482
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
After execution of the financing and construction contracts, work on the first plant is expected to begin in 2010, and this plant is expected to start operating from 2014. With the completion of the three plants, Drax aims to supply at least 10% of the U.K.'s total electricity and 15% of the country's renewable energy. The plants will provide the U.K.'s electricity market with baseload generation capacity. Drax currently operates the country's largest coal-fired power plant in Yorkshire in northern England. The company has also started using biomass in the fuel mix for this 4,000 MW power plant. Drax already has a biomass business management team, and it purchases large quantities of biomass from all over the world. The biomass is made up of ingredients such as sunflower seeds, peanut husks, straw and forest residue.
Drax has announced changes to its dividend distribution policy to finance its biomass business. During 2008 and 2009, all excess cash will be distributed, and any proceeds from refinancing deals will be used to finance the company's equity investment in the biomass business. From 2010 onwards, the company will aim for a payout ratio of 50% of underlying earnings.
Siemens Project Venture GmbH will construct the three new biomass plants for Drax, while Drax will manage and operate the business. Under the joint venture agreement, Drax will own 60% of the business. The plants will use Siemens' turbine technology, and Drax will procure the necessary biomass. Rights to port sites at Hull and Immingham have already been obtained, and efforts to procure the third site are in progress. Land at the Drax Power Station is also being considered as a viable option. Selection of the port sites indicates that a large part of the biomass will be shipped in. Drax, however, has not commented on the quantity of biomass that will be imported. It has admitted that building up a local stock would require some time.
In an effort to emphasize its commitment to reduce its carbon-dioxide (CO2) emissions, Drax recently undertook two major initiatives. The first involves the modernization of all the turbines at its Yorkshire power station. The installation of the upgraded high-pressure and low-pressure turbines, when completed, will help Drax reduce its CO2 emissions by 1 million tons per year. The second initiative is to generate at least 10% of its power from renewable sources by 2009. That will help Drax reduce its CO2 emissions by another 2 million tons per year.
In May 2008, Drax announced plans to reduce its coal consumption by using biomass. It had outlined an $83 million project to replace 10% of its coal with biomass. Alstom SA (EPA:ALO) (Levallois-Perret, France) will set up a biomass-processing plant and supply Drax with the necessary fuel. The biomass co-firing plant will have a capacity of 1.5 million tons per year and will be set up at the existing power station site. The first phase of the plant is expected to be operational from 2009. The biomass co-firing project is set to generate 400 MW of power by mid-2010 and thus become the world's largest biomass co-fired project. The project is part of the company's aim to reduce its carbon emissions by at least 15% in 2011.
Drax recently signed an $18 million engineering, procurement and construction contract with Doosan Babcock Energy Limited (Crawley, United Kingdom) under which Doosan Babcock will supply direct injection biomass co-firing systems to the six coal-fired power units at the Drax Power Station. The biomass co-fired facility will help Drax further reduce its CO2 emissions by more than 2.5 million tons per year.
View Project File - 78000423 78000482
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
