Drax is considering whether to “repurpose” its remaining coal-fired power units to run on gas, if it is unable to secure subsidies for biomass conversion.
In absence of clarity over the availability of support, the group is “looking at other options” for the three coal-fired units at its plant in Yorkshire, the company revealed in a trading update.
“We remain ready to convert further units to biomass… and we’re very pleased that the government is taking a much harder look at whole system costs, because we believe if you consider whole system costs conversion technology is one of the cheapest, if not the cheapest, on the system,” said Drax Power chief operating officer Andy Koss during a presentation to investors.
“But we’re also looking at other options as well, and one of the things we are looking at is the potential to repurpose our coal units to actually run on gas.”
Koss said the company is examining how it could make the best use of the plant and its infrastructure, including the option of retrofitting a new gas turbine to the existing steam turbine to form a combined-cycle gas turbine (CCGT). He added the qualifier that it remains “very early days”, a point which was emphasised by Drax Group chief executive Dorothy Thompson.
Three of the six units at the power station are already running on biomass with the support of subsidies awarded via the contracts for difference and renewables obligation schemes.
Koss also gave an update on the four open-cycle gas turbine (OCGT) projects which the group acquired earlier this year.
The Hirwaun Power plant in south Wales and the Progress Power plant in Suffolk have both obtained the main permits needed for the start of construction and will bid into the next four-year-ahead capacity market auction scheduled for February 2018. Drax will aim to have the plants up and running within three years of securing agreements.
The Abergelli Power plant, also in south Wales, and Millbrook Power plant in Bedfordshire are still in the process of obtaining permits and are aiming to compete in the auction for delivery in 2023/24.
To keep down costs, the same turbine design will be used at all four plants. The initial tenders will go out “very soon”.
Koss claimed the plants will be well placed to generate revenues from the “growing market for system support” which the group expects to see as old gas and coal plants shut down and more renewables come online.
He said Drax’s view was “backed up” by the recent launch of a National Grid consultation on plans to overhaul ancillary and balancing services such as frequency response and black start.