UK power generation major Drax Group (LON: DRX) unveiled ambitious plans for its bioenergy with carbon capture and storage (BECCS) operations in the USA in a Capital Markets Day announcement yesterday.
The company said it has selected two initial BECCS sites in the US South with a projected combined capacity to capture around 6Mt of carbon per year by 2030. Nine additional US sites are being evaluated for greenfield and brownfield development.
The total investment per plant in the USA will be around $2 billion, with the financial investment decision expected in 2026 and commercial operation projected to start by 2030.
Furthermore, Drax will establish its global BECCS headquarters in Houston, Texas, which is seen as providing “access to the highly skilled workforce needed to support the growth of this part of the group”. To support the development, the company has hired 80 employees across the USA and Canada.
Drax is capitalizing on the US Inflation Reduction Act which is offering tax and other incentives to accelerate the transition to a clean energy economy.
“Our plans to invest billions in critical renewable energy and carbon removal technologies will help to tackle the climate crisis and could create thousands of jobs whilst generating secure, renewable power. This investment is underpinned by our strong operational performance,” Will Gardiner, CEO of Drax, said in a comment.
The group is also considering options to implement BECCS on existing non-Drax assets, while eying development in other regions, including Europe and Australasia.
Drax sees strategic growth opportunities of £7 billion (nearly $8.7 billion) between 2024 and 2030, which is its target date for becoming carbon negative. This includes 14Mt of carbon removals per year from BECCS, pellet production and pumped storage hydro, according to the announcement.