Joint venture will use ash from power station to produce low carbon cement

Drax Power has agreed a 20-year joint venture agreement with Power Minerals to enable development of a facility to turn pulverised fuel ash (PFA) into a substance called Supplementary Cementitious Material (SCM).

The SCM will then be sold to the construction industry and used in 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 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.”