New analysis by Baringa and commissioned by Drax Group (Drax) – The Value of BECCS at Drax Power Station – finds that Drax’s proposals for bioenergy with carbon capture and storage (BECCS) could save the UK up to £15bn in whole economy costs between 2030 and 2050.
This saving is equivalent to around £700m per annum, or £25 per household per year, and could help provide a more efficient pathway to meeting the UK’s Net Zero targets.
BECCS is currently the only credible technology that can create carbon removals while also supporting UK energy security by generating renewable electricity. Drax could initially convert two of its generating units to the technology at its North Yorkshire site.
Baringa’s findings demonstrate that without BECCS at Drax, meeting carbon reduction targets is more complicated and expensive for the UK Government and carbon savings would be needed in other sectors. Including, for example, investment in synthetic natural gas production facilities costing £8.5bn, committing to 735,000 more heat pumps beyond existing stretch targets, costing £5bn, amongst other measures.
Will Gardiner, CEO Drax Group, said: “Climate change is the greatest challenge we face and the UK needs to use every option available to reduce carbon emissions and reach Net Zero as urgently as possible.
“This research shows BECCS at Drax Power Station offers the most cost-effective, straightforward and efficient way to help the country meet climate targets and could save billions of pounds, remove millions of tonnes of carbon from the atmosphere and support the UK’s energy security.
“To hit the UK’s annual carbon removal target, we need to build BECCS at Drax Power Station. Policy support for deploying BECCS grew in 2023, including the publication of the Biomass Strategy, and we believe that we will see the launch of a consultation on the bridging mechanism shortly.”
With around 7 GW of nuclear and coal capacity expected to close between 2024 and 2030, and growing uncertainty around timelines for new nuclear deployment, Baringa’s research underscores the critical role of Drax in delivering both cost effective energy security today and following potential BECCS conversion, in the future. The power station generates around 4% of the country’s power and 9% of its renewable electricity by output.
The report also shows that the implementation of a bridging mechanism between the end of Drax’s renewable contracts in 2027 and the potential start of BECCS operations could save around £2bn over the period, if gas prices remained similar to the current winter period. This is the equivalent to reducing each UK household’s yearly energy bills by £5. Under Baringa’s model, if gas prices spiked over one winter period, as they did in 2021/22, then the mechanism could save households around £3.5bn in one winter period alone.
Drax investment in UK BECCS could also deliver up to 10,000 high-skilled jobs across the UK at the peak of the project’s construction, as well as safeguarding up to 7,000 direct and supply chain jobs.