Drax completes Pinnacle Renewable Energy acquisition
UK power utility Drax Group plc has announced the completion of its previously announced agreement on the acquisition of Canada-headed wood pellet producer Pinnacle Renewable Energy Inc. The acquisition positions Drax as the world’s leading sustainable biomass generation and supply business, increasing its annual operational capacity from 1.6 million tonnes to 4.9 million tonnes of pellets from 2022, at 17 plants in locations across Western Canada and the US South.
Drax has completed the acquisition of the entire issued share capital of Pinnacle Renewable Inc. The agreement has received overwhelming support from both sets of shareholders with 95.97 percent of Pinnacle’s and 99.99 percent of Drax’s shareholders voting in favour.
It transforms Drax into a truly international business, trading bioenergy from the North American continent to Europe and Asia, and positions the enlarged Group to take advantage of global growth opportunities, with the market for biomass pellets for renewable generation in Europe and Asia expected to grow significantly.
This large and geographically diversified asset base enhances Drax’s sourcing flexibility and security of supply.
The acquisition will increase Drax’s annual operational capacity from its current 1.6 million tonnes to 4.9 million tonnes of sustainable biomass pellets from 2022, at 17 plants in locations across Western Canada and the US South.
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, said Will Gardiner, CEO of Drax.
Of this increased capacity, 2.9 million tonnes will be available for Drax’s self-supply requirements from 2022. It will also give the Group access to four deepwater 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 (CO2) from the atmosphere each year.
By becoming a world leader in BECCS, Drax can deliver on its purpose of enabling a zero-carbon, lower-cost energy future, and achieve its ambition to become a carbon-negative company by 2030. Drax will seek to export its BECCS expertise around the world to support global efforts to address the climate emergency.
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, said Will Gardiner.