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 CANADIAN PRESS/Alex Panetta
Economists “cautiously hopeful” for economic recovery in Alberta

Charles St. Arnaud says Alberta’s recover will rebound along with roll-out of the COVID-19 vaccine

Alberta’s chief medical officer of health Dr. Deena Hinshaw acknowledged that Friday would be one year since the first case of COVID-19 was identified in the province. (photography by Chris Schwarz/Government of Alberta)
Three more Red Deer COVID-19 deaths, 331 active cases in Alberta

Red Deer is down to 362 active cases of the virus

The remains of Terry Bearden’s property before a demolition crew came in to remove debris. (Photo submitted)
Rimbey arson case may have a lead thanks to reward offered by owner

Anonymous tip alleges the fire was set by three local males

hands
The call is out in Rimbey to sign on with a group that is all about building connections

‘Already, we are building a network where we can rely on each other and help each other out’

A health-care worker looks at a dose of the COVID-19 vaccine at the Palais de Congress site as Quebec begins mass vaccinations based on age across the province, Monday, March 1, 2021 in Montreal.THE CANADIAN PRESS/Ryan Remiorz
Nearly 1 million COVID-19 vaccine doses arriving in Canada this week: Anand

Anita Anand says she’s received assurances from the vaccine manufacturer

Pictured here is Stettler’s Jenner Smith with a guide dog from Aspen Service Dogs Inc. An online auction will be running soon to help raise funds for Jenner to receive his very own service dog later this year. Jenner, who is four years old, was diagnosed with Autism Spectrum Disorder in 2019. photo submitted
An online auction is planned to raise funds for a service dog for a Stettler family

Jenner Smith, four, was diagnosed with Autism Spectrum Disorder in 2019

Walter Gretzky father of hockey hall-of-famer Wayne Gretzky waves to fans as the Buffalo Sabres play against the Toronto Maple Leafs during third period NHL hockey action in Toronto on Tuesday, Jan. 17, 2017. THE CANADIAN PRESS/Nathan Denette
Walter Gretzky, father of the Great One, dies at 82

Canada’s hockey dad had battled Parkinson’s disease and other health issues

This Dec. 2, 2020 photo provided by Johnson & Johnson shows vials of its Janssen subsidiary’s COVID-19 vaccine in the United States. THE CANADIAN PRESS/AP-Johnson & Johnson via AP
Canada approves Johnson & Johnson’s 1-shot COVID-19 vaccine

It is the 4th vaccine approved in Canada and the 1st that requires just a single dose

(AP Photo/Richard Vogel, File)
Pandemic stress, isolation key factors as to why Canadians turned to cannabis, alcohol

Study found that isolation played key role in Canadians’ substance use

Backcountry skiers are dwarfed by the mountains as they make their way along a mountain ridge near McGillivray Pass Lodge located in the southern Chilcotin Mountains of British Columbia, Tuesday, Jan. 10, 2012. Avalanche Canada has issued a special warning to people who use the backcountry in the mountains of western Alberta and eastern British Columbia. THE CANADIAN PRESS/Jonathan Hayward
Avalanche Canada special warning for mountains in western Alberta, eastern B.C.

Avalanche Canada also says everyone in a backcountry party needs essential rescue gear

A vial of some of the first 500,000 of the two million AstraZeneca COVID-19 vaccine doses that Canada has secured through a deal with the Serum Institute of India in partnership with Verity Pharma at a facility in Milton, Ont., on Wednesday, March 3, 2021. THE CANADIAN PRESS/Carlos Osorio - POOL
Federal panel recommends 4-month gap between COVID vaccine doses due to limited supply

The recommendation applies to all COVID-19 vaccines currently approved in Canada

FILE - Dolly Parton arrives at the 61st annual Grammy Awards on Feb. 10, 2019, in Los Angeles. The Grammy-winning singer, actor and humanitarian posted a video on Tuesday, March 2, 2021, of her singing just before getting her COVID-19 vaccine shot. Parton donated $1 million to Vanderbilt University Medical Center in Nashville, Tennessee for coronavirus research. (Photo by Jordan Strauss/Invision/AP, File)
‘Vaccine, vaccine’: Dolly sings ‘Jolene’ rewrite before shot

The Grammy-winning legend turned 75 this year

Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks about the Fiscal update during a news conference in Ottawa, Monday November 30, 2020. THE CANADIAN PRESS/Adrian Wyld
COVID-19: Wage and rent subsidies, lockdown support to be extended until June

Chrystia Freeland says now is not time to lower levels of support

Most Read