FutureMetrics LLC on June 17 published a white paper discussing how expected changes to U.K. bioenergy subsidies could cause the Drax and Lynemouth Power Stations to consider using thermally treated wood pellets.
The two facilities are the world’s largest consumers of wood pellet fuel for power generation. Drax operates four 650 megawatt (MW) units that were converted from coal to wood pellets, while Lynmouth operates three 140 MW units that were converted from coal to wood pellets.
Together, the facilities consume 8 to 9 million metric tons per year of wood pellets. Most of that fuel is sourced from North America and must be kept dry during storage and transportation.
With current operations, both power stations generate a continuous demand for fuel, which is met by a continuous supply.
Both facilities currently operate under the U.K.’s Contract for Difference (CfD) support scheme, which ends in March 2027. The U.K. government has announced plans to offer an interim subsidy program designed to help keep the plants operational and available for baseload power until they are able to implement bioenergy with carbon capture and storage (BECCS).
FutureMetrics explains that this interim subsidy program is expected to create significant changes to the generation profiles of the Drax and Lynmouth facilities, as operations will only be supported when power from the plants is needed to meet demand. When intermittent renewables, such as wind and solar, are able to meet demand on their own, the biomass facilities won’t operate.
In the white paper, FutureMetrics predicts that the subsidy change could cause U.K. demand for wood pellets to drop by 3 million to 4 million metric tons per year, introduce significant seasonal shifts in demand for wood pellet fuel, and disrupt the current logistics chain. Under a worst-case scenario, FutureMetrics predicts there could be significant need for additional pellet storage, estimated at 2.2 million metric tons.
That volume of storage capacity would be expensive to build, operate, maintain and monitor. The use of thermally treated wood pellets (TTWP) could offer a solution to many of these problems by eliminating the need for costly dry storage and enabling the power plants to store significant inventory onsite in currently unused coal yards.
“It may be lower net cost and lower risk to pay a modest premium for the fuel and avoid the massive costs and risks associated with managing the inventory that has to be stored somewhere,” FutureMetrics said in the white paper. “TTWP’s have low to zero risk of self-heating and, when stored outdoors in the currently unused coal yards, there are no risks of catastrophic losses.”
A full copy of the white paper is available on FutureMetrics’ website.
