£20m acquisition extends Drax’s control over biomass production

Drax Power Station

North Yorkshire power station, Drax, has agreed to acquire the remaining 10% minority interest in Alabama Pellets LLC joint venture from Two Rivers Lumber Co LLC for a cash consideration of US$22m/£19.6m.

The acquisition of Pinnacle Renewable Energy Inc in April 2021 included a change of control provision over Alabama Pellets, in which Two Rivers held a 10% interest.

 Alabama Pellets is comprised of the Aliceville and Demopolis pellet plants. Drax burns this wood pellet biomass to generate electricity.

Aliceville, which commissioned in 2018, has a nameplate production capacity of 300,000 tonnes per annum. Demopolis, which commissioned in 2022 and is co-located with a Two Rivers sawmill, has a nameplate production capacity of 360,000 tonnes per annum.

The acquisition will provide Drax with net economic control over a further 66,000 tonnes of sustainable biomass production capacity per annum, rights over land associated with Demopolis and extend long-term fibre supply arrangements.

Completion of the deal is expected to take place in October 2022.

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