Drax Subsidies Hit £893 Million Last Year

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

Drax have just published their latest Annual Accounts:

Subsidies for their biomass operation reached £893 million last year. All of this is added to our electricity bills:

EBITDA for the year was £398 million, so Drax would effectively be bankrupt without their subsidies.

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fretslider
March 20, 2022 2:18 am

What a colossal waste of money

What was that about thinning forests?!!!

aussiecol
Reply to  fretslider
March 20, 2022 3:11 am

That’s what it should be about, but unfortunately the narrative has stolen the limelight.

Reply to  fretslider
March 20, 2022 7:08 am

Told you so 20 years ago.
In 2002 we published that there was no real global warming crisis and green energy was not green and produced little useful (dispatchable) energy. We also correctly predicted in 2002 that solar-driven global cooling would start about now, and that does appear to be happening. We further predicted in detail in 2013 the current green energy crisis in Britain, Germany etc. These are, to my knowledge, the best (earliest and most accurate) predictions of our current climate-and-energy disaster. [Insert strong expletive here].
We did not make these correct predictions in order to gloat about being correct – we made them in order to prevent them from happening, to save real people from hardship and to save real lives. I cannot express how frustrating it is to have foreseen this disaster and to watch as it unfolded, having warned against it for the past two decades, and it still happened and is still happening! [Insert even stronger expletive here].
It is clear that the Climate-and-Covid scams were deliberate and were perpetrated by the same gang of thugs from the World Economic Forum et al. It is past time for Nuremberg 2.0!
{Rant/off}

Last edited 3 months ago by Allan MacRae
TonyL
March 20, 2022 2:32 am

People just do not understand.
Drax advantages:
1) It’s cheaper (*)
2) It’s cleaner (**)
3) It’s environmentally sound (***)

(*) Please ignore those subsidies, they are just paid for by the rate-paying peasants. They do not count.
(**) Please ignore all the nitrogen and sulfur oxide emissions which are an inevitable by-product of biomass burning.
(***) Please ignore the huge volume of wood pellets that are shipped across the Atlantic, burning more diesel than the wood is worth.

Ron Long
Reply to  TonyL
March 20, 2022 3:14 am

TonyL, since you skipped the “sarc” tag, I am thinking you, like me, were born sarcastic. This virtue signaling nonsense deserves sarcasm, and more.

Leo Smith
Reply to  Ron Long
March 20, 2022 4:54 am

Except that Drax is not and never has been into ‘virtue signalling’. Drax as a coal burning power station was privatised and floated along with the nukes as a company called British Energy.

At some point the nuclear power side was sold to EDF. The coal power staion becanme Drax holdings (I think) and independently listed company.

All Drax has done is to try and stay a viable business by doing whatever the government indicated would allow it to continue as a viable business.

To close it down now and give the subsidy to wind or solar on the grounds that it doesnt deserve a green label, would be hypocrisy on your part.

And wreck the UKs grid. We would need three big nukes to replace Drax, or 15 small modular reactors. Somewhere between £20bn and £60bn, or more. Meanwhile wood chips are cheaper than gas.

That is what you need to set against a £1bn in subsidies.
Right now the only power stations the UK can afford not to subsidize are windmills and solar panels.

Ron Long
Reply to  Leo Smith
March 20, 2022 5:24 am

The bad decisions of converting to inefficient and undependable energy sources was not due to economic analysis, it was due to virtue signaling. OK, Drax is trying to survive, but consuming taxpayer money, in the form of subsidies, adds to the problem. The irony is that the advocates of “green” energy end up paying increased energy invoices, and then they believe the socialists claim that the greedy capitalist companies are responsible (See whispered message from AOC on the topic).

Scissor
Reply to  Leo Smith
March 20, 2022 5:50 am

Are wood “chips” the English equivalent of American wood “pellets?”

Spetzer86
Reply to  Scissor
March 20, 2022 6:22 am

In the case of Drax, they often literally are American wood pellets.

Gunga Din
Reply to  Spetzer86
March 20, 2022 3:29 pm

So Drax is just a big wood burning steam engine?
Like the Old West’s “Iron Horse” train engine?
The difference being that the “Iron Horse” actually got you somewhere?
(And it had to make a profit on it’s own or it would be shut down.)

Rick C
Reply to  Scissor
March 20, 2022 9:13 am

No. Chips are just that small chunks of wood chopped off a log. Pellets are made from ground wood or sawdust run through a high pressure extrusion press which densifies the wood and causes the lignin to bind it to together. Pellets are more uniform, energy dense and generally drier than chips.

Citizen Smith
Reply to  Rick C
March 20, 2022 10:46 am

Pellets in the Drax sense are hammer milled from chips taken from debarked logs. The fiber is dried to a specified moisture content range. It is a processed fuel with a consistent energy to volume or ton performance. And just as important, pellets handle better. They flow out of storage systems reliably. (Chips, generally a 1″x1″x1/8″ piece of wood don’t handle as well and are designed mainly for chemical pulping. They are a handy interim form for other processes.) All this takes huge amounts of energy and capital investment. Drax owns and operates at least 2 large 600 tons per day mills in the Southeast US. They may own more and certainly buy pellets on the open market. Just a swag here but a 600tpd mill may have 12,000hp of process equipment plus fuel for drying plus transportation and labor and raw material. The mill only is a $200,000,000 investment plus port facilities, ships and trucking or rail. Nuc isn’t looking so bad.

Reply to  Leo Smith
March 21, 2022 1:44 am

Methinks, sir, you miss the point that

wood chips are cheaper than gas

because of subsidies.
Subsidies are, next to ‘foreign investment’, the biggest scam ever. All subsidies are fraudulent institutionalised charity, and all institutionalised charity is wholesale fraud.
Just look at Baal Gates'”philanthropy”, or go find the 1 comma many Billions collected for Haiiti…

Leo Smith
Reply to  TonyL
March 20, 2022 4:44 am

People just do not understand.

Drax is the largest thermal power station in the UK, larger than any gas or nuclear plant.

Without Drax the grid would collapse under the weight of windmills and solar panels.

Drax used to burn coal. It sat on a coal mine. It was happy burning coal. The EU and the government told it to stop, so it invested billions in burning all it was allowed to. Wood chips. It never sought to paint itself as green, it just wanted to survive. It is a public listed company. caught up an insane energy policies.

It converted to wood on the basis of a promise of far more green subsidies than it ended up getting.

The economic case for subsidizing Drax has to be shown not in isolation but in comparison to the alternatives. It is a lot cheaper than building and running more gas power stations of equivalent output. Or backup diesel plant.

Of course we shouldn’t be here, but due to appalling political interference in energy in the UK and Europe, we are.

Subsidising Drax is the least worse alternative right now, and as a former sharehgolder, in their coal days, I can assure you that they are existing on a knife edge of profitability right now.

We need Drax and its 4GW of reliable dispatchable power to run and stabilize the grid.

Drax may be a mote in someone’s eye, but wind and solar are the beams…

Ron Long
Reply to  Leo Smith
March 20, 2022 5:26 am

Excuse my bluntness, but it might be useful if the idiots that voted for the green nonsense froze and stopped voting.

oeman 50
Reply to  Leo Smith
March 20, 2022 8:40 am

It is also my impression that Drax retains the capability to burn coal and has been asked to do so on at least one occasion when the wind died down.

Gunga Din
Reply to  Leo Smith
March 20, 2022 3:34 pm

Thanks, Leo, I didn’t know it’s history.
But it does go back to the Green’s senseless war on coal.

Retired_Engineer_Jim
Reply to  Leo Smith
March 20, 2022 8:34 pm

“… knife edge of profitability …” Is it fair to call the excess profits when there is so much subsidization?

Rick C
Reply to  TonyL
March 20, 2022 9:06 am

TonyL: I get your sarcasm, but wood burning does not produce sulfur compounds as wood has negligible sulfur content. NOx produced is similar to natural gas. The main pollution concern with wood burning is particulates which require careful control of burning conditions to reduce to acceptable levels. I personally favor home heating with wood using modern high efficiency/low emissions appliances. But it is most practical for those with access to low cost local sources of cordwood.

Bill Parsons
Reply to  Rick C
March 20, 2022 11:02 pm

Rick C.

RE: . I personally favor home heating with wood using modern high efficiency/low emissions appliances.

Would you identify such an appliance? I’m interested as a potential buyer.

As for the kerfuffle about Drax and … forest thinning??? …. what’s the connection which justifies the condemnation of a useful tool for reducing wild fire risk, removing vast swaths of beetle-infestation, and which also offers financial benefits. It is not clear-cutting. It is selective removal to improve the health of the forest. Here is one such business model that takes advantage of the NEED for thinning.

https://coloradomastication.com/land-clearing-projects/

They accept cash and checks.

I gather Drax is a heavily subsidized power generator that is gobbling up fuel shipped from North America.  and it is much hated for one or both of those reasons But as other commenters here point out, the generator doesn’t care what combustible you put in it – coal, wood or yesterday’s London Daily News. One might conjure some problems with nuclear energy if you stare at it too closely. How it’s being fed might be criticized. The fact that it’s producing reliable GWs of energy must be lauded.

Forest thinning is a beneficial process which is seemingly only condemned by the environmentalists whose kneejerk reaction is: cutting trees bad.

In Colorado there are over a million acres of pine beetle infested forests, one tree in every 14. Dead trees and scrub oak become fire fodder. They can either burn where they stand or in a fireplace or industrial furnace. Standing dead trees and infected living trees need to be selectively cut and hauled off. If they go to chippers and then into somebody’s stove, so much the better.

The last article here telling me what a “dumb idea” forest thinning drew its primary support from a research team of “environmental engineers” out of Princeton which begins, “Reforestation and afforestation (R&A) are among the most promising natural climate solutions…” When the lead tells us our climate needs a solution, that says it all.

Suburban and rural Japanese encourage a thriving understory by training teams of seniors to climb trees and prune them by hand. Teams of oldsters like to prune pine forests for something exciting and rewarding. Over generations, us old f*rts with nothing to do but read blogs could harvest tons of dead wood that would serve to warm people’s homes.

@ 28 pounds per cubic foot, a 30-foot tree might weigh half a ton. Around 800 million dead trees (in Colorado), that’s 400 million tons – sorry, “tonne”. @ 10 million tonnes a year, it might be enough to sate the mighty DRAXX for around 40 years. 

Other fuels are consumed to harvest and chip it, but if today’s shade of Greens don’t want coal… it’s ready fuel, mostly “cured” standing. What’s dumb is to NOT use it.

Stephen Skinner
March 20, 2022 2:35 am

Publicly funded destruction of forest so as to ‘save the planet’. Only a lunatic could consider this all a great idea. Oh wait…

Philip
March 20, 2022 3:14 am

Subsidies equal product/ideological failure. Products and ideas that can stand on their own in a free market don’t require taxpayer subsidies. Get government out of private/corporate business. The idea that this business or that business is too big to fail is government abusing the taxpayer’s trust. Spending taxpayer dollars on entities the taxpayer hasn’t collectively agreed to support. It’s undemocratic.

Peta of Newark
March 20, 2022 3:22 am

Quote:” so Drax would effectively be bankrupt without their subsidies.

Nothing new there – it’s all about control.
i.e. Drax does what Gov. says it should do

Exactly whar ‘Farm Support Payments‘ are all about and pretty well always have been.
Best of all, the money within those payments ‘go straight through’ the farms/farmers, barely touching the sides.
Because,as we see here, being Gov. Money the subsidies are very highly visible – Cronies ## read these reports and learn about them elsewhere and simply. via an informal unspoken cartel, ramp up the prices they charge for their services & supplies to the recipients of the ‘support’

It’s ‘Free Money‘ after all, so why not?
Foresters of America hang your heads with shame.

## The Lovely Thing is, The Cronies are companies with ex-ministers, ex Members of Parliament and senior civil servants working for them as ‘ consultants’ ‘advisers’ and Members of the Board. Gorgeous example being John Seldom Glummer (Lord Deben) and the UK recycling firm ‘Veolia’
They have the contacts & experience, they ‘can see things coming’ and be ready to harvest the windfall.
How cosy and comfortable can it possibly get?

It is also what powers the entire EU bureaucratic machine and the unelected elite that operate within it in Brussels/Strasbourg.
Seeing as The EU entirely revolves aound Germany, it makes you wonder, as Basil Fawlty often raved about, who exactly did ‘win the war’?

Alan the Brit
Reply to  Peta of Newark
March 20, 2022 4:23 am

I seem to recall from my history books, in the middle of the last century a certain Austro-German fella dreamed of a European Super-State run by Germany, that is precisely what the EU is, Germany says leap & the other member states say “how high”!!!

Leo Smith
Reply to  Alan the Brit
March 20, 2022 4:55 am

Except it now seems that Germany is unable to run at all without that nice Mr Putin’s gas…

fretslider
Reply to  Peta of Newark
March 20, 2022 4:48 am

Basil Fawlty often raved about, who exactly did ‘win the war’?”

While the Germans asked: However did they win?

Leo Smith
March 20, 2022 4:33 am

I will just say two things.

1/. How much subsidy was paid to renewable energy of the intermittent kind, compared to Drax?

2/. How much reliable energy, compared to Drax, did it generate?

If it had been allowed to, Drax would be still burning coal and waste. It did what government told it to, to stay in business.

observa
March 20, 2022 4:56 am

Drax investors prefer to think of it as a planet saving subscription service and somebody has to take care of efficiently administering the warm inner glow for donors.

fretslider
March 20, 2022 5:02 am

There’s more! Drax was dropped from an index of green energy firms amid biomass doubts…

“The plan put forward by Drax to fit its wood-burning power plant with carbon-capture technology could cost British energy bill payers £31.7bn over 25 years, or £500 a household, according to research.”

https://amp.theguardian.com/business/2021/may/25/drax-carbon-capture-plan-could-cost-british-households-500-study

I’m guessing they’re ignoring “The Science”:

“Most schemes to capture and reuse carbon actually increase emissions”

https://www.newscientist.com/article/2308935-most-schemes-to-capture-and-reuse-carbon-actually-increase-emissions/

Still, it’s only another £31.7 billion.

Last edited 3 months ago by fretslider
MR166
March 20, 2022 5:18 am

I wonder how many generations of trees can be harvested from NA forest lands before the soils are depleted. I have been told that the jungles of the world are not really that fertile and the soils are easily used up.

Secondly what happens to all of that waste ash that Drax produces. Is there a useful purpose for it.

Scissor
Reply to  MR166
March 20, 2022 6:00 am

The production of paper, especially for newspapers, is down significantly over about the past decade and Drax has picked up some of that supply.

Wood ash has has some uses, especially for addition to concrete/cement. It could be used to produce lye soaps.

Last edited 3 months ago by Scissor
Gunga Din
Reply to  Scissor
March 20, 2022 3:45 pm

Hmm … soap for the mouths of those that lie in the MSM and cement for the mouths of the politicians they support.
Something good may come of this!

MR166
March 20, 2022 5:19 am

I wonder how many generations of trees can be harvested from NA forest lands before the soils are depleted. I have been told that the jungles of the world are not really that fertile and the soils are easily used up.

Secondly what happens to all of that waste ash that Drax produces. Is there a useful purpose for it?

Willem Post
March 20, 2022 5:38 am

Achieved by proudly clearcutting the forests of the State of Georgia in the US, then grinding the green trees into sawdust, then drying the sawdust, then making pellets, then loading pellets into railroad cars, then shipping pellets to DRAX for co-firing with coal, which has been declared by EU bureaucrats to be a clean way to burn dirty coal.

All this is dripping with hypocrisy

Scissor
Reply to  Willem Post
March 20, 2022 6:05 am

Yeah, the eco narrative is not exactly true, but to be fair, the best parts of the trees are taken and sold for higher value uses.

Willem Post
Reply to  Scissor
March 20, 2022 6:20 pm

Not the Georgia pines.
They go 100% into pellets.
I visited Georgia, seen it done.
Even the locals agree, it is an utter travesty

March 20, 2022 6:44 am

Drax is anti-environmental. Only politicians* could be this stupid.
 
 * … and the people who vote them in…

Bill S
March 20, 2022 7:54 am

The best solution seems to be to covert Drax back to coal. Coal produces 9% less CO2 per unit of energy than 45% moisture chips. This is the number at the power station, and does not include CO2 produced in Georgia to grind, press, and ship wood pellets from Waycross, Ga to the UK.

The rational for would chips as “sustainable” is flawed from the beginning. The premise is that CO2 from wood chips is recaptured from new trees planted and grown to produce more wood chips for the future. Coal is seen as just adding CO2 without the recycling benefit of trees.

I live in GA and have been involved in the forestry industry here. The flaw in this reasoning is that no one in GA is growing trees to supply Drax. Drax provides additional value from harvested trees for the trash part of the tree. If sales to Drax ended tomorrow, it would not affect the decisions of tree farmers and paper companies of how many trees to plant in the least.

There is no link between CO2 produced at Drax, and tree production. CO2 in the air is CO2 in the air, with no driver connected to decisions to produce more of any kind of CO2 absorbing plant material anywhere on the globe. Drax can reduce its total CO2 emissions and continue to produce needed reliable power by converting back to the coal mine next door.

AndyHce
Reply to  Bill S
March 20, 2022 10:57 am

Does anyone really know? Here you say 9%. I seen figures that say more than 100% more CO2 than coal per unit of electricity produced.

It may not be economical and it may not save on CO2, but burning the wood for power generation is certainly more rational than burning it in massive forest fires.

Mike Lowe
Reply to  Bill S
March 20, 2022 12:29 pm

Why are we falling into the activists’ trap of talking about reducing CO2, when WE all know we need MORE of it. Well done Drax!

griff
March 20, 2022 9:40 am

Once again I’m pleased to see Watts readers joining green groups like Greenpeace in opposing this expensive boondoggle which does not save CO2.

Green groups dispute power station claim that biomass is carbon-neutral | Drax | The Guardian

Bruce Cobb
Reply to  griff
March 20, 2022 10:54 am

No, there is no “agreement”, because you and your Greenpiss buddies would just as soon see Drax get shut down, whereas the sensible, rational thing to do is to switch back to coal power. You people are anything but rational.

Bill S
Reply to  griff
March 20, 2022 11:42 am

This Watts reader is against this boondoggle, and all of the other end of the world because of CO2 boondoggles. Add up all of money spent just by GB on windmills, solar farms, and the higher cost of energy as a result of this idiocy. Let’s pick 1 trillion pounds. All of that money has been wasted because the reduction in CO2 from GB will not make any difference.

The money spent on global warming has a negative rate of return because the cost of energy is higher than it would have been but for this investment. The opportunity cost of not leaving the money in the economy to be invested and earn 5% to10% annually compounded over 20 years is huge. You have intentionally lowered the standard of living in GB and received no benefit for your sacrifice.

Gunga Din
Reply to  griff
March 20, 2022 3:51 pm

Wind, Solar, Batteries are not “carbon neutral” from production to destruction. (When the subsidies run out.)
Nor are they “renewable” or reliable. (Unless you know where Lithium and Cobalt trees grow?)

March 20, 2022 2:38 pm

The ultimate Green Scam : Get paid £893 Million annually to do large scale deforestation. Only a lunatic or criminal would think this was sensible.

Gunga Din
Reply to  nicholas tesdorf
March 20, 2022 3:53 pm

Well, as long as they don’t disturb the Northern Spotted Owl …

Bill S
Reply to  nicholas tesdorf
March 21, 2022 8:32 am

Pine trees in the SE United States are essentially a row crop with a 15 to 18 year cycle rather than the 12 month cycle of corn or soybeans. Forest acreage in the SE has actually increased because of the utility of the trees for wood pulp for paper mills, and construction materials.

Ewin Barnett
March 20, 2022 5:27 pm

Striving for sustainability appears to be fiscally unsustainable.

ResourceGuy
March 20, 2022 5:57 pm

Follow the money, again

Dennis G. Sandberg
March 20, 2022 11:53 pm

When we’re wasting a $trillion/year, a $billion here and there is chump change. Just print some more money /sarc

niceguy
March 21, 2022 2:00 pm

And yet then complain about fossil subsidies!!!

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