UK’s Drax to spend $120M on U.S. pellet plant
December 14, 2012
By Argus Media
December 14, 2012 London, UK — UK generator Drax will spend more than US $120 million building a large wood pellet production facility and storage and shipping facility at the Port of Greater Baton Rouge in Louisiana.
Drax confirmed the plans to Argus earlier this month, and a joint statement from its US arm Drax Biomass International and local authorities at the state of Louisiana highlighted the incentives and local supplies available to Drax in Louisiana.
Drax is assessing additional locations in the southern US and has confirmed plans for a 723,000 t/yr pellet production plant in Gloster, Mississippi.
The UK firm received a permit for the plant — Morehouse Bioenergy — earlier this month and is proposing a 524,000 t/yr pellet production plant. The generator will have access to 169,000 acres (680km²) of timberland in Morehouse Parish and be able to draw on forestry products within a 50-mile (80km) radius of the facility. The plant will source logs and residual forest products from private and industrial landowners who manage sustainable forests in the region.
Drax began discussions with the state of Louisiana in January. To secure the project, the state offered the firm a custom incentive package that will include a $1.7mn economic development loan programme commitment that will not require repayment if the company meets payroll performance obligations. Drax will receive the services of the state workforce training programme at no cost. The company is also expected to use Louisiana's employment and industrial tax exemption programmes.
"With Louisiana's support, we are looking forward to moving these projects through development and into construction during the first part of 2013,” Drax Biomass chief executive Chuck Davis said.
The firm will require around 7mn t/yr of wood pellets as it works towards converting three of its six coal-fired units at its Selby plant in the UK to run on biomass.
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