B.C.-based Pinnacle Renewable Energy is being taken over by British-based Drax Power Ltd., the latest sign of an international push to low-carbon energy production.
Drax has agreed to pay $385 million for Pinnacle in a bid for its shares that has been endorsed by Pinnacle91裸聊视频檚 board and its largest shareholder. Drax operates the Drax Power Station in Yorkshire in northern England, a former coal-fired plant that has converted to biomass. It supplies about five per cent of Britain91裸聊视频檚 electricity, and Drax says it is the largest decarbonization project in Europe.
fits with Drax91裸聊视频檚 objective to increase its own pellet supply, and its existing export contracts with Mitsubishi of Japan and other Asian buyers are also interesting to the company as the world shifts to low-carbon energy, Drax CEO Will Gardiner says. The U.K. government has incentive programs that run until 2027 to pay above market rates for power produced by wind, solar and biomass.
91裸聊视频淲e91裸聊视频檙e actually moving to the next step, which is delivering not only carbon-neutral power, but carbon-negative power,91裸聊视频� Drax CEO Will Gardiner says
91裸聊视频� Tom Fletcher (@tomfletcherbc)
91裸聊视频淥ne of the things that91裸聊视频檚 critical for us is that we want to increase our self-supply,91裸聊视频� Gardiner said in an interview with Black Press Media Feb. 8. 91裸聊视频淲e want to bring down the cost of biomass power generation, so we can run beyond 2027 if that regime is not renewed.91裸聊视频�
The U.K. now has a legislated commitment to reach 91裸聊视频渘et zero91裸聊视频� greenhouse gas emissions by 2050, and Drax has a plan to go beyond carbon neutral by adding carbon capture and storage to its operation.
91裸聊视频淲e91裸聊视频檙e actually moving to the next step, which is delivering not only carbon-neutral power, but carbon-negative power,91裸聊视频� Gardiner said. 91裸聊视频淚n the U.K the government thinks they91裸聊视频檒l need about 15 million tonnes of negative emissions in 2050 to get to net zero.91裸聊视频�
Drax already has wood pellet plants in the southern U.S., a direction followed by Pinnacle under CEO Duncan Davies, who led U.S. expansion of Interfor Corp. during his time as CEO of that company.
With the completion of a pellet facility at Demopolis, Alabama, expected by mid-2021, Pinnacle91裸聊视频檚 production outside of B.C. is expected to grow to 44 per cent of the company91裸聊视频檚 pellet volume. The latest U.S. plant brings its capacity to 2.8 million metric tonnes per year.
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Pinnacle91裸聊视频檚 previous expansion is a partnership with Tolko Industries for a pellet plant in High Level, Alberta that began production in December 2020 with a target of 200,000 metric tonnes per year. Tolko is also a partner in Pinnacle91裸聊视频檚 plant at Lavington, B.C., east of Vernon.
Pinnacle has 11 pellet production facilities, including ones at Williams Lake, Houston, Burns Lake and Hixon B.C., forest areas that were affected by fires and a pine beetle outbreak that spread across Western Canada. With an export terminal at Prince Rupert and expansion into Alberta and the U.S., Pinnacle has become the second largest pellet producer in the world.
Pinnacle started in 1989, manufacturing pellet fuel from sawmill waste at Quesnel. It went public in 2018 and began a redevelopment of its Smithers facility, a new plant at Entwistle, Alberta, and majority stake in a pellet plant at Aliceville, Alabama.
tfletcher@blackpress.ca
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