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

A soldier walks along the outside of a crater formed through a demolition. Photo: Aaron Hemens
Military exercises assist with restoration of Lower Kootenay Band wetlands

A total of nine craters were created through demolitions, where the goal is to have them serve as future habitats for ducks and geese.

Fields Forward’s fruit press machine. (File photo)
Regional food processing facility coming to Creston

The facility will produce juices from fruits and vegetables, package vegetables for institutions, bottle jams, freeze-dry products into powders and provide other food processing services.

Al Garrecht holds up a plaque acknowledging his “service above self” from the Creston Valley Rotary Club during a tribute meeting on Feb. 9, 2021. Photo: Dave Handy
Creston Valley Rotary Club bids farewell to longtime member Al Garrecht

“Thank you, Al Garrecht. You leave an incredible legacy of service with CVRC. You live our motto, ‘Service Above Self’. Thank You.”

Frisky Whisky owner Cori Karountzos, left, and Frisky Whisky manager Marissa Bilcik. Photo: Aaron Hemens
Creston’s Frisky Whisky wins two business awards in its inaugural year

The 1920’s style Speakeasy tapas lounge won the best in customer service for small businesses award, as well as the best in hospitality and tourism award.

Winlaw artist Lou Lynn is one of eight Canadians to win a Governor General's award this year. Photo: Janet Dwyer
Winlaw artist Lou Lynn wins Governor General’s award

Lynn is among eight artists honoured throughout Canada

B.C. health officer Dr. Bonnie Henry and health minister Adrian Dix wore pink shirts to showcase this year’s motto: “Lift each other up.” (Twitter/PinkShirtDay)
PHOTOS: B.C. celebs take a stand against bullying on Pink Shirt Day

‘We need to let young people know they are not alone and they can reach out to others for help’

(Black Press Media file photo)
B.C. residents can reserve provincial camp sites starting March 8

B.C. residents get priority access to camping reservations in province

Two women were arrested in Nanaimo for refusing to wear masks and causing disturbance on a BC Ferries vessel. (File photo)
B.C. ferry passengers arrested and fined for disturbance, refusing to wear masks

Police said woman threatened their pensions in Feb. 21 incident aboard Nanaimo-bound boat

When his owner had knee surgery, Kevin, 2, was able to continue to go for walks thanks to volunteers from Elder Dog Canada. (Contributed photo)
B.C. woman has nothing but praise for Elder Dog Canada

National organization has a fleet of volunteer walkers ready, but needs more clients to serve

Justin Morissette is still recovering from the injuries sustained in the altercation. He is not yet able to walk without assistance. (Justin Morissette, Twitter)
B.C. man suing city and police over violent altercation with anti-LGBTQ preacher

Justin Morissette argues police knew the threat the preacher posed, and failed to keep the peace

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Jack Barnes, who was Cowichan Valley Capitals property from May 2020 until last week, scores a goal for the Penticton Vees during the 2019-20 BCHL season. (Brennan Phillips/Black Press)
COVID-crunched BCHL facing trade deadline dilemma with its 20-year-olds

Hard decisions loom when BCHL may or may not resume play

UBC Okanagan students are among the most food insecure in Canada, according to a new study by UBC.
(Phil McLachlan - Capital News)
UBC Okanagan students among most food insecure in Canada

42.3 per cent either can’t properly feed themselves, or are worried they will soon run out of money

Oliver Elementary School. (File)
Interior Health reports potential COVID-19 exposure at South Okanagan elementary school

Interior Health lists two dates for the potential exposure

Most Read