Biomass storage domes at Drax Power Station in Yorkshire, England, a former coal-fired plant that is Europe’s largest decarbonization project. Drax has bid to take over Pinnacle Renewable Energy, the B.C.-based pellet maker that is now the world’s second largest. Photo © Chris Allen (cc-by-sa/2.0) Geograph.org.uk

Biomass storage domes at Drax Power Station in Yorkshire, England, a former coal-fired plant that is Europe’s largest decarbonization project. Drax has bid to take over Pinnacle Renewable Energy, the B.C.-based pellet maker that is now the world’s second largest. Photo © Chris Allen (cc-by-sa/2.0) Geograph.org.uk

British firm Drax bids to buy B.C.-based pellet maker Pinnacle

Wood waste company has expanded into Alberta, U.S.

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 Pinnacle’s 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 Britain’s electricity, and Drax says it is the largest decarbonization project in Europe.

Pinnacle fits with Drax’s 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.

“One of the things that’s critical for us is that we want to increase our self-supply,” Gardiner said in an interview with Black Press Media Feb. 8. “We want to bring down the cost of biomass power generation, so we can run beyond 2027 if that regime is not renewed.”

The U.K. now has a legislated commitment to reach “net zero” greenhouse gas emissions by 2050, and Drax has a plan to go beyond carbon neutral by adding carbon capture and storage to its operation.

“We’re actually moving to the next step, which is delivering not only carbon-neutral power, but carbon-negative power,” Gardiner said. “In the U.K the government thinks they’ll need about 15 million tonnes of negative emissions in 2050 to get to net zero.”

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, Pinnacle’s production outside of B.C. is expected to grow to 44 per cent of the company’s pellet volume. The latest U.S. plant brings its capacity to 2.8 million metric tonnes per year.

RELATED: Pinnacle completes upgrade at Williams Lake plant

RELATED: Japanese buyer expands pellet contract with Pinnacle

Pinnacle’s 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 Pinnacle’s 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.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Climate changeforestry

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

HIGHLAND sECONDARY scHOOL comox
COVID-19 exposure at sixth Comox Valley school in past eight days

Island Health has posted an exposure alert at a sixth Comox Valley… Continue reading

Artist Sandra Meigs will be the next speaker in NIC’s online 2021 Artist Talk series, appearing virtually on Friday, March 5 at 1 pm. For the full schedule and link to attend the Artist Talk Online Series, visit https://nicart.tickit.ca/. (Photo: The Glass Ticker (2017) — 15’ X 9’ X 5’, wood, enamel, lights, aluminum, glass, automata. Photo by Toni Hafkenscheid.)
Celebrated artist and mentor joins North Island College Artist Talk series

North Island College’s virtual 2021 Artist Talk series welcomes Sandra Meigs, past… Continue reading

The Coast Range makes a spectacular backdrop for orca heading towards Discovery Passage of Campbell River Saturday, Feb. 27, 2021. Photo by Frank Neil
Island wildlife viewers thrilled by close view of passing Orca pod

Group gives wildlife photographers a classic opportunity to view them off Campbell River shoreline

Dasher is back home with mom Christine Girvin thanks to some help from BC Ferries staff. Photo supplied
The cat came back, with help from Comox ferry staff

After Dasher made a dash, ferry staff found her and got her home safe

A rendering of the Denman Green plans for the Kirk Road site. Image, DHA/Ronan Design
Denman Green finds new site for housing

Facing COVID delays, the project reached expiration date on initial site

A health worker holds a vial of AstraZeneca vaccine to be administered to members of the police at a COVID-19 vaccination center in Mainz, Germany, Thursday, Feb. 25, 2021. The federal state of Rhineland-Palatinate, start with the vaccination of police officers in internal police vaccination centers. (Andreas Arnold/dpa via AP)
B.C. officials to unveil new details of COVID vaccination plan Monday

Seniors and health-care workers who haven’t gotten their shot are next on the list

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A boat caught fire in Ladysmith Harbour on Saturday morning. (Photo submitted)
Search underway for missing woman after boat catches fire in Ladysmith harbour

A large boat caught fire on the morning of Saturday, Feb. 27

An investigation is underway after a man was shot and killed by Tofino RCMP in Opitsaht. (Black Press Media file photo)
Man shot and killed by RCMP near Tofino, police watchdog investigating

Investigation underway by Independent Investigations Office of British Columbia.

B.C. Supreme Court in Vancouver on Tuesday December 11, 2018. THE CANADIAN PRESS/Darryl Dyck
B.C.’s compromise on in-person worship at three churches called ‘absolutely unacceptable’

Would allow outdoor services of 25 or less by Langley, Abbotsford and Chilliwack churches

Photo: Lt. Sandy Pridmore, MARS Darlene Banerd, MARS, Warren Warttig and Captain Rob Stevens show the new automatic external defibrillator (AED) that will be located at the MARS facilities located at 1331 William Beach Road, Black Creek. Photo supplied
Mountainaire Avian Rescue Society adds AED to Williams Beach Road location

Submitted Mountainaire Avian Rescue Society (MARS) has collaborated with the Comox Firefighters… Continue reading

Baldy Mountain Resort was shut down on Saturday after a fatal workplace accident. (Baldy Mountain picture)
Jasmine and Gwen Donaldson are part of the CAT team working to reduce stigma for marginalized groups in Campbell River. Photo by Marc Kitteringham, Campbell River Mirror
Jasmine’s story: Stigma can be the hardest hurdle for those overcoming addiction

Recovering B.C. addict says welcome, connection and community key for rebuilding after drug habit

Most Read