Drax has switched off one of the three remaining coal units at its power station in Yorkshire as it prepares to convert the unit to run on biomass.
The work is expected to be completed over the summer before the unit is returned to service in the second half of 2018.
Drax has already invested around £700 million converting half of the six units at the 3.9GW power station to burn biomass, as well as creating the associated supply infrastructure.
By reusing redundant kit from when it first began co-firing biomass and coal eight years ago, the company says it will be able to convert the fourth unit at a much lower cost of just £30 million. A trial last year confirmed that the old co-firing delivery system could be modified to deliver wood pellets in sufficient quantities to be used as part of a complete conversion.
Andy Koss, chief executive of Drax Power, said: “Switching the fourth unit from coal to biomass is another milestone in the transformation of the power station.
“It will extend the life of the plant, protecting jobs both here at Drax and in the supply chain, whilst delivering cleaner, reliable power for millions of homes and businesses.”
Of three existing biomass units at the power station, two receive subsidies through the Renewables Obligation (RO) scheme, whilst the third is supported by a Contract for Difference (CfD).
Drax originally sought a CfD for the conversion of the fourth unit but was prevented from doing so by the government, which deemed it ineligible. The company fought a court battle to reverse the decision which it eventually lost. As a result, the unit will instead receive Renewable Obligation Certificates (ROCs).
In order to limit the impact on energy bills, the government decided in July 2015 to end the grandfathering policy for new biomass conversion projects receiving subsidies through the RO. Under this policy, once a unit had been accredited and begun receiving ROCs, this level of subsidy would be maintained for the full duration of its support.
Then in September 2017, the government put forward further proposals to curb the cost of subsidies by either capping the number of ROCs a non-grandfather unit could receive or adjusting the number of ROCs they were entitled to per megawatt hour.
Following a consultation on the plans, ministers opted for the former. Announcing the decision in January, the government revealed that the cap of 125,000 ROCs per year would be applied across the whole of a generating station rather than just individual units.
The whole-station cap is calculated by taking a forecast of the number of ROCs any grandfathered units would have otherwise received and adding 125,000 for each non-grandfathered unit.
Speaking to Utility Week in February, Koss said the latest conversion at Drax would not have happened had the cap been applied to individual units: “The fact that we now have this cap being applied across all units means we can optimise our biomass generation across three units in total.
“We’ll be running a lot in winter time, in the peak periods, when carbon intensity is higher, and less so in the summer, when prices are lower and carbon intensity is much lower.”
Drax plans to replace the last two coal units with up to 3.6GW of gas generation and up to 200MW of storage. They will each be substituted with high-efficiency combined-cycle gas turbine and a battery storage system. The existing steam boilers and turbines will be reused to generate electricity using the exhaust heat from the gas turbines.
Last month, the company applied for a development consent order for the proposals. It also unveiled plans to trial carbon capture and storage on one of its three existing biomass units.