JV to transform power station ash into low-carbon cement
Drax Power has agreed to a 20-year joint venture agreement with Power Minerals to enable the development of a facility to turn pulverised fuel ash (PFA) into a substance called Supplementary Cementitious Material (SCM).
The SCM, a key ingredient in low-carbon green cement, will then be sold to the construction industry and used in the production of cement with a lower carbon footprint.
The new facility will be next to the Drax Power Station site in North Yorkshire.
Under the agreement, Birmingham-based Power Minerals will construct, own and operate the new facility, while Drax will sell PFA to the joint venture as well as provide power and water to the facility, in addition to sharing the profits of the sales of SCM. There is no capital investment required by Drax.
The new facility is expected to begin operations by the end of 2026, with an expected annual production of 400,000 tonnes once operating at full capacity.
Drax believes the project could generate incremental adjusted EBITDA of around £5m per annum for Drax post-2027 through to 2046.
Lee Dawes, Drax’s chief operations officer said: “This is a landmark deal not only for Drax, but for the UK construction industry.
“Cement production is one of the most carbon intensive processes in the world and through this partnership, we will be able to help the construction industry cut its carbon emissions in the years ahead.
“Drax Power Station is integral to the country’s energy security and now through this new agreement it can play a further role in reducing carbon emissions in UK construction as well.
“The opportunity to sell large volumes of PFA from Drax Power Station as part of a long-term joint venture is another way in which we can realise incremental value from the site whilst helping to reduce carbon emissions.
“It is an exciting time for Drax as we continue to develop options for long-term investment in the site, including Bioenergy with Carbon Capture and Storage and a data centre.”
Nigel Waldron, PML’s managing director said: “We are proud to have pioneered the use of ashes from Drax for more than 20 years, and now we are delighted to be a part of this major investment, securing a long-term future for our business and our relationship with Drax for decades to come.”
Nils Jansen, head of cementitious materials at PML’s parent company, EP Power Minerals said: “This substantial investment and its projected returns represent a game-changer not only for PML, but for the entire EPPM Cementitious Materials business. This positions us to become the leading player in the UK fly ash market for the foreseeable future.”
