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

Just Posted

Do Your Part Recycling Co is celebrating 15 years of its operation in Terrace this May. (Binny Paul/Terrace Standard)
How a homegrown Terrace business became a vital cog in the regional recycling initiative

Do Your Part Recycling owner Kasey Lewis on how they started 15 years ago

Construction continues on Coast Mountain College’s student residence on May 12, 2021. (Ben Bogstie/Terrace Standard)
VIDEO: Work continues on major projects at Coast Mountain College

Price tag of $35 million set for housing, substantial renovations

Terrace city council gave first and second reading to zoning amendment bylaws for the proposed transload facility located next to Keith Ave. (Image courtesy Hatha Callis, Progressive Ventures Group)
Next inland port public hearings set for June

Terrace council gave first and second reading to establish new zone, rezoning application

Skeena Valley Farmers Market will host Northern Health’s COVID-19 vaccination booth on May 15. ( Skeena Valley Farmers Market/Facebook)
Northern Health to set up COVID-19 vaccine booth at Skeena Valley Farmers Market

The booth will be set up on the south side of the market towards Park Ave. on May 15

Both Lanfear Hill, pictured here, and Kalum (Skeenaview) will be closed at different times this evening going into Friday morning. (File photo)
Two hills to be temporarily closed tonight

Pipe inspections first on Lanfear and then on Kalum

Prince Rupert was one of the first B.C. communities targeted for mass vaccination after a steep rise in infections. Grey area marks community-wide vaccine distribution. (B.C. Centre for Disease Control)
B.C. tracks big drop in COVID-19 infections after vaccination

Prince Rupert, Indigenous communities show improvement

A COVID-19 patient receives oxygen outside a hospital in Jammu, India, Wednesday, May 12, 2021. (AP/Channi Anand)
B.C. donates $500K to Red Cross COVID-19 relief efforts in India

The money will provide oxygen cylinders and ambulances for patients in communities grappling with the virus

Superintendent Aaron Paradis, community services officer with the Surrey RCMP, during a media availability about a recent drug bust in Port Coquitlam. (Photo: Lauren Collins)
Police seize 13 million ‘potentially fatal doses’ of pure fentanyl at B.C. drug lab

The evidence was seized at large, illicit drug manufacturing site in Port Coquitlam

B.C. Public Safety Minister Mike Farnworth debates the province’s latest measure to control crime, March 10, 2021. The legislation allows police to impound vehicles used to transport weapons and further restricts sale of vehicle and body armour. (B.C. legislature video)
B.C. seeking ways to ‘name and shame’ gangsters, minister says

Mike Farnworth appeals to family members to talk to police

Jonathan Prest had to climb way up to the top of a dead red cedar tree to rescue a terrified cat, but he made it up and down successfully. (Facebook photos)
Tree cutter rescues cat stuck 100 feet up a dead and dried-out cedar

Jonathan Prest put himself in extreme peril to get a terrified cat out of a dangerous situation

The Greater Victoria School District continues to face backlash over its wording and approach to Indigenous learners in its 2021-2022 budget talks. (Black Press Media file photo)
School district’s approach to Indigenous learners leaves Victoria teachers ‘disgusted’

Backlash grows over ‘pattern of colonial thinking permeating the leadership’

Italian-Canadian prisoners at the Kananaskis prisoner of war camp in Alberta. (University of Calgary/Contributed)
Italian moved to Okanagan with hope; he ended up being sent to a WWII internment camp

Raymond Lenzi shares his grandfather’s story ahead of Canada’s planned formal apology to Italian-Canadians

Then-minister Rich Coleman, escorted by Victoria Police, makes his way to the east wing amid a protest blocking the legislature entrances before the throne speech in Victoria, B.C., Tuesday, Feb. 11, 2020. THE CANADIAN PRESS/Chad Hipolito
B.C. money laundering inquiry testimony ends today with reappearance of Rich Coleman

Responsible for the gaming file off and on from 2001 to 2013, Coleman been recalled after his initial testimony to the Cullen Commission last month

Colin Dowler rests in hospital recuperating from wounds suffered from a grizzly bear attack north of Campbell River. He was able to end the struggle by stabbing the bear in the neck with a knife like the one he is holding. Photo submitted
‘Bad-ass dude that took on a grizzly bear’ doesn’t let 2019 B.C. attack bring him down

Campbell River’s Colin Dowler gets on with his life as his rehabilitation continues

Most Read