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Drax invests US$40 million in three new "satellite" pellet plants in Arkansas

UK-headed power utility and world-leading sustainable biomass production and supply major Drax Group has announced that it is investing US$40 million in the construction of three new "satellite" pellet plants in Arkansas (AR) in the United States (US). Drax will begin construction of the first plant later this month near a West Fraser Timber Co. Ltd (West Fraser) sawmill in Leola, Grant County – with commissioning expected in October.

US dollars

Drax Group is investing around US$40 million in the construction of three 40 000 tonnes per annum “satellite” pellet plants in Arkansas (AR). Construction of the first plant near a West Fraser Timber Co. Ltd (West Fraser) sawmill in Leola, Grant County with commissioning expected in October will begin later this month.

The company will begin construction on two more plants in other locations in the coming months. In total, Drax will invest US$40 million in the state, creating approximately 30 new direct jobs and many more indirect jobs across three Arkansas communities.

The development of the “satellite” pellet plants is part of Drax’s strategy to increase biomass self-supply for its biomass-fired power station in the UK to five million tonnes by 2027, improving supply chain resilience while reducing pellet costs.

By building these new pellet plants Drax is bringing jobs and opportunities to rural communities in Arkansas, boosting the state’s post-COVID economic recovery. Through this investment, Arkansas will play an important role in combating climate change, supporting Drax to increase the amount of sustainable biomass we produce as part of our plans to pioneer bioenergy with carbon capture and storage. By using sustainable biomass, we have displaced coal-fired power generation, reduced carbon emissions, and provided renewable electricity for millions of homes and businesses in the UK, said Will Gardiner, CEO Drax Group.

The Leola “satellite” pellet plant is expected to produce around 40 000 tonnes per annum of pellets. Drax will also utilize the sawdust and other dry residual materials, which are by-products created when timber is processed, at West Fraser’s facility.

Drax’s ambitious company vision combined with the renowned tenacity and loyalty of Arkansans makes this partnership an excellent match. I am confident that this investment will benefit both the company and our communities for years to come, said Governor Asa Hutchinson.

By co-locating the pellet facilities with sawmills, Drax will benefit from lower infrastructure, operational, and transportation costs. Each pellet plant is expected to produce 40 000 tonnes per annum, with the total cluster expected to produce 120 000 tonnes annually.

The pellets from the new satellite plants will be transported to Bruce Oakley Terminal in Little Rock, AR before being shipped south to Louisiana (LA) to oceangoing vessels.

Each of these three Arkansas communities will be uniquely impacted by today’s announcement. Families in different regions across the state will experience new opportunities and their communities will experience continued growth because of Drax’s investment. I congratulate Drax on this exciting news and look forward to the ways that Arkansas will be influential in accomplishing the company’s mission to provide renewable electricity for millions of homes and businesses, said Arkansas Secretary of Commerce Mike Preston.

Reducing the costs of its biomass supports the renewable energy company’s world-leading ambition to be carbon negative by 2030 by developing bioenergy with carbon capture and storage (BECCS).

This negative emissions technology could permanently remove millions of tonnes of carbon dioxide (CO2) from the atmosphere while producing the renewable electricity needed to decarbonize global economies and address the climate emergency.

Drax owns and has interests in 17 other pellet plants and development projects across the US and South and Western Canada. The company plans to host job fairs to recruit for positions at the Leola site later this month.

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