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UK generator Drax signs long-term CCS solvent deal with MHI Engineering

Highlights

BECCS needs state support to proceed

First unit could be running in 2027

Hybrid CfD, carbon payment model 'optimum'

UK generator Drax is to use Mitsubishi Heavy Industries Engineering's carbon capture technology at its North Yorkshire biomass power station site under a new long-term contract, the companies said June 10.

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With state support, bioenergy with carbon capture and storage (BECCS) could enable the generator to become carbon negative by 2030, but there is currently no mechanism to reward negative emissions in UK energy or carbon markets, Drax told S&P Global Platts.

"The first BECCS unit at Drax could be operational as soon as 2027, supporting thousands of jobs across the North of England as soon as 2024, and capturing and storing at least 8 million tonnes of CO2 a year by 2030," it said, noting the planning process had already begun.

Drax has four 650 MW wood pellet-fueled generation units at Selby and is the UK's largest renewable energy generator. It has trialed both MHI and C-Capture solvents to capture carbon, resulting in a decision to license MHI's KS21 solvent.

"The C-Capture pilot was the company's first demonstration outside of the lab, however it currently isn't yet ready to scale to the size we require," a Drax spokesman said.

MHI's solvent, however, had been proven at large scale on different flue gases in global tests, he added.

Deployment of BECCS at scale at Drax was dependent on "an effective negative emissions policy and investment framework from the government," the generator said.

In last year's energy White Paper, the government said it would establish a potential role for BECCS by 2022 in a Bioenergy Strategy.

"For new technologies like BECCS to be developed the government must implement new policies to incentivise investment," the spokesman said.

A hybrid contract for differences and carbon payment model would allow deployment of negative emissions technologies like BECCS to thrive, he said.

It would also allow time for current carbon pricing legislation to be amended, supporting the creation of a market-based approach for negative emissions, potentially removing the need for subsidies in future, he said.

As part of the solvent licensing agreement, MHI would locate its core CCS team in London and look at ways to strengthen its supply chain, including the potential production of solvent in the UK.

"We look forward to expanding our presence in the UK and developing a centre of excellence for the deployment of carbon capture technology across Europe, the Middle East and Africa region," said Kenji Terasawa, president and CEO of Mitsubishi Heavy Industries Engineering.

Commercial coal generation at Drax's Selby site ended in March 2021, with full closure of the two remaining coal units slated for September 2022.

A key part of Drax's strategy is to bring down the costs of biomass by a third to GBP50/MWh ($69/MWh) by 2027, when UK subsidies for biomass come to an end.