Tackling climate change

We believe we have an important part to play in managing the transition of the UK towards a low carbon economy. At Drax Power Station our focus is on co-firing and thermal efficiency improvement.

On co-firing, we aim to produce 12.5% of our output from renewable biomass materials by mid-2010, the equivalent output of around 600 wind turbines which will save over two and a half million tonnes of CO2 each year.

During 2008, we co-fired 412,000 tonnes of biomass, which, due to the carbon neutral status of biomass, avoided emissions of 644,000 tonnes of CO2.

At the centre of our thermal efficiency improvement programme is the £100 million upgrade of the high and low pressure turbines of each of our six generating units. During the major planned outages of 2008 we installed one high pressure and three low pressure turbine modules to each of two units. Together with the early installation of one high pressure turbine module during 2007, this means that we are now just over one-third of the way through the upgrade project and already saving over one-third of a million tonnes of CO2 emissions a year.

On completion of the upgrade in 2011 we will see an improvement in our overall baseload efficiency of 5%, taking it towards 40%, and an additional annual saving of one million tonnes of CO2 emissions.

We fully recognise the challenge that we and other fossil fuel-fired power stations face in tackling carbon emissions and these two projects, when complete, will reduce our emissions of CO2 by over three and a half million tonnes or 17.5% by the end of 2011.

Our focus on co-firing and in particular biomass procurement has made us well placed to pursue the development of a dedicated biomass-fired power generation business. Our plan to develop three 300MW biomass-fired power plants alongside the co-firing capability at Drax Power Station, could result in Drax becoming responsible for supplying at least 15% of the UK’s renewable power, and up to 10% of total UK electricity.

At the heart of our work with biomass is our sustainability policy, which places us at the forefront of the introduction of sustainable biomass practices in the UK. Through a set of sustainability principles we aim to ensure that the biomass consumed in our generation facilities is environmentally sustainable.

As a result of our policy we will strive to reduce greenhouse gas emissions by at least 70% in comparison to coal-fired generation. Furthermore, we will engage a qualified third party to develop and implement a rigorous programme of audit and verification of biomass supply chains to ensure compliance against these principles and our policy.

In addition, we have been involved in research projects with industry partners which have the potential for considerable savings in emissions of CO2. We participated in Yorkshire Forward’s initiative to examine the potential for carbon capture and storage infrastructure in the Yorkshire area which reported in the year.

Taking these initiatives forward, and others like them, is only possible within a regulatory framework which is both certain and predictable. Given the right framework, investment in clean coal technologies which will put the UK on a sure path to a low carbon future, whilst delivering reliable and secure supplies of electricity, will be incentivised.

Environmental performance and compliance

We recognise our responsibilities to society and the environment and we are committed to furthering the environmental leadership position we hold in the coal-fired sector. Where practicable we work towards reducing the environmental impacts of our business, in line with our policy to regard compliance with legislation as a minimum level of achievement.

We manage our environmental compliance under an Environmental Management System (“EMS”). During the year our EMS was externally audited and we were successful in maintaining certification to the international standard ISO 14001: 2004.

We freely discuss our environmental performance and activities with our stakeholders and are sensitive to their views and concerns. Amongst our staff, business partners and contractors we promote environmental awareness, ensuring that they understand the environmental aspects of their activities, that they act responsibly and are competent to undertake their duties.

We are pleased to report that there were no breaches of our environmental consents during the year.

Emissions to air

The principal emissions from burning coal are CO2, sulphur dioxide (“SO2”), nitrogen oxides (“NOX”), and particulates (“dust”). Our generating units have all been retrofitted with Flue Gas Desulphurisation (“FGD”) equipment which removes, on average, at least 90% of SO2 emissions before the flue gas is released via the chimney into the atmosphere.

We maintain investment in our emissions abatement equipment and consider this to be a high priority. Our FGD plant already complies with SO2 emissions limits to 2016 and we have now completed a programme of retrofitting all units with low NOX, Boosted Over Fire Air technology in line with the NOX requirements of the Large Combustion Plant Directive (“LCPD”). All of our six units have been retrofitted and performance has been in line with expectations.

Discharges to water

Procedures are in place to ensure that all discharges and drainage to water are monitored and treated where necessary to meet our discharge consent limits. There are a number of sources of discharge and drainage as part of the electricity generation process, including the cooling water used to cool the condensers, which as part of the steam cycle condense steam to water after it leaves the turbines and before returning to the boilers. The FGD process produces effluent water which is treated in a specially designed plant before it is discharged to the river, and there is also drainage from the main plant, coal plant and roads.

Water is abstracted mainly from the River Ouse and boiler feedwater originates from two boreholes on site. Approximately half of the water is returned to the River Ouse at a few degrees warmer than the river water.

Disposals to land

When coal is burnt, ash is left as a residue. The finer particles of ash, pulverised fuel ash (“PFA”), are collected from the flue gas by electrostatic precipitators; the heavier ash, furnace bottom ash (“FBA”) falls to the bottom of the boiler. The majority of ash is sold to the construction industry with the remainder sent for landfill at the power station’s adjacent ash disposal site, which over time has been developed into farmland, woodland and wetland features providing a haven to many species of wildlife and birdlife.

Whilst our target is zero ash landfill, our ability to sell ash depends on the state of the construction industry. Hence performance in 2008 was not as good as we would have liked, reflecting contraction in the construction industry in the second half of the year, and we were forced to dispose of material to the ash disposal site. The construction of an ash rail loading facility was completed in 2008 and this will help us to improve our ash export capability through providing greater and more efficient access to construction markets around the country.

We pay landfill tax on the PFA disposed of to the ash disposal site. Through the Landfill Tax Credit Scheme, we are able to claim a tax credit against our donations to recognised Environmental Bodies. We have worked with Groundwork Selby since 2001 on projects designed to help mitigate the effects of landfill upon our local community. During 2008, we contributed approximately £71,500 towards local community-based projects designed to bring about sustainable environmental benefits and contribute to the social and economic regeneration of the area.

Alternative fuels

To help maintain our vital role in the UK economy and safeguard cost effective power production, our fuel strategy recognises the need to sustain a ready supply of traditional quality coal and how best to incorporate alternative fuels, including different fossil fuels and renewable biomass materials. The choice of fuels has to be balanced with availability and flexibility of supply. The combustion of petcoke, a fuel derived from the petroleum industry, is an integral part of our strategy of developing and utilising alternative fuels.

A considerable amount of environmental data on the combustion of petcoke has been collected and analysed, where possible using independent specialists. In line with our policy on openness and transparency all data have been made publicly available.

Our results have provided conclusive evidence that there is no detectable impact on the environment through burning blends of coal and up to 15% petcoke compared to coal at Drax and, as a result, in early 2008 the Environment Agency accepted our case for commercial burn of coal/petcoke blends across all six units up to 600,000 tonnes per year of petcoke. The use of petcoke is now a normal part of station operation and during the year we burnt 268,000 tonnes.