The principal constraint on the future use of coal in power generation is environmental. We participate in the EU Emissions Trading Scheme (EU ETS) which regulates emissions of carbon dioxide (CO2) from installations including power generation, mineral oil refineries, offshore installations and other heavy industrial sectors.
In 2008, as a result of the Large Combustion Plant Directive (LCPD) the amounts of sulphur dioxide (SO2), oxides of nitrogen (NOX) and particulate matter emitted from combustion plants were reduced.
Whilst complying with the increasing environmental pressures, Drax has to operate within a highly competitive market and so we need to protect ourselves, as far as we are able, from future possible market fluctuations, be it another collapse in power prices or increasing fuel costs. It is important that Drax has the option to burn as wide a range of fuels as possible if it is to be competitive and have a long-term future.
It is likely that Drax will ultimately burn coal from a number of UK and international sources, and in that way ensure a supply of coal of the right quality and at the right price. Alternative fuels, such as biomass and petroleum coke also need to be considered within the future fuel supply context, as they give considerable scope for improving the business by introducing an element of flexibility in fuel source that can help to offset the cost of cleaning up emissions.
The environmental challenge