Acquisition positions Drax as a world leader
Energy business Drax has today completed its acquisition of Pinnacle Renewable Energy Inc – a major producer and supplier of good quality, compressed bioenergy pellets.
Drax says the deal positions it as “the world’s leading sustainable biomass generation and supply business.”
It notes the acquisition received overwhelming support from both sets of shareholders with 95.97% of Pinnacle’s and 99.99% of Drax’s shareholders voting in favour.
Drax says the enlarged Group will be able to take advantage of global growth opportunities, with the market for biomass pellets for renewable generation in Europe and Asia expected to grow significantly.
And the acquisition will increase Drax’s annual operational capacity to 4.9 million tonnes of sustainable biomass pellets from 2022, at 17 plants in locations across Western Canada and the US South – up from 1.6Mt now.
Of this increased capacity, 2.9 million will be available for Drax’s self-supply requirements from 2022. It will also give the Group access to four deep water port facilities and three major wood fibre baskets.
By advancing the strategy to increase self-supply and reduce biomass production costs, the acquisition paves the way for the company’s plans to deliver Bioenergy with Carbon Capture and Storage (BECCS), permanently removing millions of tonnes of carbon dioxide from the atmosphere each year.
Will Gardiner, chief executive officer of Drax, said: “This is an exciting and important acquisition which positions Drax as the world’s leading sustainable biomass generation and supply business.
“I am delighted to welcome our new Pinnacle colleagues to the Drax family and look forward to what we can achieve together.
“As well as making Drax an international supplier of sustainable biomass, this deal advances our strategy to increase self-supply, reduce our own biomass production cost and create a long-term future for sustainable bioenergy.
“We expect to benefit greatly from Pinnacle’s operational and commercial expertise.
“Through this deal we are also advancing our plans to use BECCS to permanently remove millions of tonnes of carbon dioxide from the atmosphere each year and become a carbon negative company by 2030.
“Negative emissions from BECCS are vital if we are to address the global climate emergency. BECCS will also provide a significant share of the renewable electricity needed in a net zero economy, support green jobs and drive growth in a post-COVID recovery.”