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

The Ladysmith Museum has two new exhibits open to the public. (Cole Schisler photo)
Ladysmith museum opens up with two new exhibits

The museum is featuring Prime Predators of Vancouver Island and ‘Red Flag, Red Flag’

Nanaimo Ladysmith Public Schools is preparing a rapid response team proposal for submission to the B.C. Ministry of Education. (Chris Bush/News Bulletin)
Nanaimo-Ladysmith school district chosen to field COVID-19 rapid response team

Team to consist of SD68 and Island Health staff, according to B.C. Ministry of Education

Cole Schisler, editor of the Ladysmith Chronicle.
Hatred has no place anywhere

We accomplish so much more when we respect each other

FILE – A COVID-19 vaccine being prepared. (Olivia Sullivan/Sound Publishing)
B.C. seniors 80 years and older to get COVID vaccine details over next 2 weeks: Henry

Province is expanding vaccine workforce as officials ramp up age-based rollout

Rachel Dunstan Muller. (Submitted photo)
Ladysmith storyteller Rachel Dunstan Muller launches pair of podcasts

Hintertales: Stories from the Margins of History and Sticks and Stones and Stories are available now

Provincial health officer Dr. Bonnie Henry updates B.C.’s COVID-19 situation at the B.C. legislature. (B.C. government)
B.C. reports 10 additional deaths, 395 new COVID-19 cases

The majority of new coronavirus infections were in the Fraser Health region

A new survey has found that virtual visits are British Columbian’s preferred way to see the doctor amid the COVID-19 pandemic. (Unsplash)
Majority of British Columbians now prefer routine virtual doctor’s visits: study

More than 82% feel virtual health options reduce wait times, 64% think they lead to better health

Captain and Maria, a pair of big and affectionate akbash dogs, must be adopted together because they are so closely bonded. (SPCA image)
Shuswap SPCA seeks forever home for inseparable Akbash dogs

A fundraiser to help medical expenses for Captain and Maria earned over 10 times its goal

The missing camper heard a GSAR helicopter, and ran from his tree well waving his arms. File photo
Man trapped on Manning mountain did nearly everything right to survive: SAR

The winter experienced camper was overwhelmed by snow conditions

Cory Mills, Eric Blackmore and A.J. Jensen, all 20, drown in the Sooke River in February 2020. (Contributed photos)
Coroner confirms ‘puddle jumping’ in 2020 drowning deaths of 3 B.C. men

Cory Mills, Eric Blackmore and A.J. Jensen pulled into raging river driving through nearby flooding

Castlegar doctor Megan Taylor contracted COVID-19 in November. This photo was taken before the pandemic. Photo: Submitted
Kootenay doctor shares experience contracting COVID-19

Castlegar doctor shares her COVID experience

Ashley Paxman, 29, is in the ICU after being struck by a vehicle along Highway 97 Feb. 18, 2021. She remains in critical condition. (GoFundMe)
Okanagan woman in ICU with broken bones in face after being struck by car

She remains in serious condition following Feb. 18 incident

Vancouver International Women in Film Festival kicks off March 5.
Women in Film Festival features two B.C. filmmakers

The 16th annual festival kicks off March 5, 2021

The booklet roots present day activism in the history of racist policies, arguing the history must be acknowledged in order to change. (CCPA)
New resource dives into 150 years of racist policy in B.C.

Racist history must be acknowledged in order to change, authors say

Most Read