Power but no glory: cleaning up coal power

Old-fashioned coal-fired stations such as Drax are finding ways of cleaning up their act to stay viable

by Andrew Saunders
Last Updated: 09 Oct 2013

Make no mistake, the power station at Drax is big.

Approaching the 750-hectare site across the flat, featureless countryside near Selby, south of York, you can't miss its dozen 114m-high cooling towers dominating the skyline. On a clear day, you can see them from the edge of the Yorkshire Dales 25 miles away, billowing steam - but no lava or ash – like so many synthetic volcanoes.

Its operating stats are equally gargantuan. At full tilt, the boilers consume 36 tonnes of pulverised coal a minute, providing superheated steam at a pressure of 165bar to turn the six huge generating sets at 3,000rpm. These feed 4,000Mw into the National Grid through an array of humming transformers and crackling overhead cables. Welcome to the largest and most efficient coal-fired power station in western Europe.

All pretty impressive in a Boy's Own Book of Facts kind of way. Unfortunately, Drax is best known for a rather less edifying stat that has made it a target for climate change campaigners, and put huge pressure on parent company Drax Group to do something to make the giant generator more sustainable and less of an eco-baddie in the eyes of the public.

It is the UK's single largest producer of carbon dioxide, chucking 22m tonnes of the stuff into the skies every year. No wonder protestors feel so strongly about it. However – and here's the rub – Drax is also a strategic national asset. If it were to shut down, the protesters might be satisfied, but the UK would pay a high price for those lower carbon emissions. Drax generates as much as 7% of the UK's total electricity demand, enough to power some 4 million homes, or hundreds of thousands of businesses. It's a lot of people to leave in the dark.

Then there's the energy gap: in the next decade, the UK will lose nearly 20% of its generating capacity, as the last nuclear power stations reach the end of their lives. Replacements are scheduled, but won't be ready in time. As newly appointed energy minister Chris Huhne is doubtless realising, it will be hard enough to keep the lights on as it is, without losing any more capacity – regardless of its carbon footprint.

It's a conundrum with which Drax's CEO, Dorothy Thompson, is all too familiar. 'We are the largest single-site emitter of carbon in the UK,' she admits. 'We decided quite a long time ago to reduce our carbon emissions. And if you are a coal-fired generator, there are really only two ways to do that – to improve your technology or burn something else.'

So the engineers at Drax have been busy scratching their heads trying to do both. Efforts to improve the technology have focused on achieving better controlled and more complete combustion of coal in the boiler and on fitting new blades to the steam turbines that will enable them to operate more efficiently, especially at less than full power.

All that only promises to trim emissions by a few percent. It's the boffins' efforts on the 'burn something else' front that have attracted the most interest, offering the prospect of CO2 reductions of 20% or more. Since 2004, experiments have been undertaken to figure out the best way of persuading Drax's boilers – all between 30 and 40 years old, designed to consume powdered coal – to adopt a more varied and planet-friendly vegetarian diet, in the form of plant-based biomass.

Biomass fuel can be anything from straw bales to sewage sludge, but at Drax they have been concentrating on burning straw and wood: elephant grass and willow branches, to be specific. These are reduced to a powdery mulch, before being blown into the boilers as a replacement for a proportion of the pulverised coal that would otherwise fuel the plant.

In theory, biomass – a seriously green alternative to fossil fuels – could be the answer to Thompson's prayers. If successful, it could tide the old plant over, helping to keep it on the right side of environmental legislation that constantly threatens to gobble up its already modest margins. Only last month, Drax won a last-minute reprieve from the EU, in the shape of a further three years in which to comply with more stringent emissions targets – targets which could have closed the station down.

By burning plant-based waste and by-products, Drax could significantly reduce net carbon emissions. 'There is a lot of waste that currently goes to landfill which is really biomass and could be burned for power,' says Thompson. 'A good future for Drax would be to have a significant part of the station converted to biomass and the rest running on coal, until carbon capture and storage become practical.'

The fruit of all this ingenious backyard tinkering is a facility built jointly with Siemens to handle biomass pellets, transported by train. 'We've commissioned the ability to burn biomass equivalent to 500Mw of the 4,000Mw total capacity,' says Thompson. 'It has taken a huge effort. We had to find the biomass, process it and work out how to get it into the boilers. It's the product of years of work,' she says.

It's a worthy endeavour, both environmentally and for Drax's long-suffering shareholders. They have had to put up with an ever-declining share price, down from £5 to around £3.50 in the past year.

But it is also beset by problems. For starters, as Thompson herself says, 'the biomass market doesn't exist'. So the green goal of burning locally sourced, non-crop biomass may never be realised. The fuel would have to be prepared offsite and shipped in from all over the world, with the associated hard-to-quantify but potentially significant carbon costs.

And, even then, the numbers don't stack up. 'Biomass isn't viable without a subsidy,' Thompson says. 'It's about three times the cost of coal.' Drax had been banking on getting just such a subsidy, but that now looks unlikely. What state support there is for the energy market is going into wind power.

Thompson must be hugely disappointed, but she tries not to show it. 'There is a good rationale for the emphasis on wind. But a bit more emphasis on biomass would have been sensible. Wind and biomass are very complementary – you need a backup for when the wind doesn't blow.'

She certainly cannot afford the luxury of pursuing biomass single-handed. The power station itself may be a giant but its parent, Drax Group, is a minnow. It doesn't have any other major assets and its rivals are the huge (and often foreign-owned) utilities such as EDF, E.On and Scottish and Southern Energy. These outfits have large supply businesses retailing power to millions of domestic and business customers.

Drax, by contrast, is the UK's only merchant power station – it has to live by its wits on the wholesale market. There's a fully equipped trading floor onsite and the traders who work there, selling power on everything from the day-to-day spot market to the two-and-a-half-year futures limit, have just as much claim to being the heart of the business as the engineers who keep the turbines spinning.

'We sell almost all our power wholesale, we buy all our coal on the international market and we trade our carbon permits. There's an awful lot of trading involved,' says Thompson, who has form in finance as well as the power industry. Formerly head of European business at Shell's electricity subsidiary Intergen, she became CEO of Drax in October 2005.

'I do the strategic planning, but I leave trading to the traders. Watching the team trying to fit our coal requirements against what the market is doing is fascinating.'

Softly spoken but firm, Thompson prefers getting stuck into the task to wasting time pontificating about it. What does she like most? 'Being the person who puts the team together and makes things happen. It's in my nature not to stand on the sidelines.' What about being a female boss in a male-dominated industry? 'Most meetings I go to there are no other women at, so people don't forget you.'

Much of the electricity generated in the UK comes from gas-fired plants, but around 30% is still produced by coal-fired stations – and burning coal in a gas-priced power market is not always a happy place to be. The theoretical peak profit margin on electricity is determined by the so-called 'dark green spread' – the wholesale price of power less the cost of gas – so when gas is cheaper than coal, Drax can do little to avoid the squeeze. Profits for 2009 were down a hefty 64% to £158m on revenues of £1.47bn – that's a profit margin of a slender 1%.

Who would have thought life as the country's largest single producer of a fundamental requirement of modern life would be so precarious?

All those stalled efforts on biomass are part of an attempt to make Drax less dependent on coal and more attractive to investors. There are also plans to build three smaller, 300Mw biomass-only power stations nearby, but these too are in suspended animation for want of state support. They may end up being built abroad.

'The market doesn't encourage us to build anything new because we have no confidence in where the price is going to be. I don't think the market system works at all well,' says Thompson. 'There is a barrier to new entrants. The only place where there are new entrants is in renewables, because there is government support there for the next 20 years.'

The truth is that we simply can't do without the power Drax and other stations like it produce. In the necessary rush to renewable energy, this awkward fact has been overlooked. If we are to tackle climate change and continue to prosper, we need to extract a few more years of greener life from our existing energy infrastructure. Those cooling towers need to keep steaming for a while yet.

CARBON CAPTURE AND STORAGE: CAN COAL CLEAN UP ITS ACT?

First there were pea-souper smogs, then acid rain, now it's carbon emissions. Burning coal has always come with some pretty grubby strings attached.

But there's no doubt that tackling CO2 is the biggest challenge of the lot – burning carbon, hydrogen and oxygen will always yield CO2 and water.

However, it is perfectly possible to extract 90% of the CO2 from the exhaust gases of coal-burning facilities, compress it to liquid and put it out of harm's way: into empty aquifers and similar deep geological features, for example.

This is carbon capture and storage (CCS) and it looks like the best hope for reducing the atmospheric impact of coal-fired electricity in the medium term. CCS trials are underway across the globe, but it's experimental and there's a huge amount to do before the technology is viable on an industrial scale. Current estimates are that CCS coal power could cost anywhere between 20% and 90% more than that from non-CCS coal.

It's not without other drawbacks either – powering the CCS equipment will increase overall coal consumption substantially, so net carbon reductions might turn out to be more like 60%. And the challenge of safely storing all that liquefied carbon dioxide so it can never escape into the atmosphere will be a perennial and ever-growing headache.

For all that, CCS looks set to play a key global role in keeping the lights on and climate change under control, at least until renewables come of age.

Andrew Saunders recommends

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