Drax to acquire Pinnacle Renewable Energy
This Canadian-UK combination will be positioned as a leading sustainable biomass supply and power generation business.
Technology / IIoT
SELBY — British energy company Drax has agreed to acquire Pinnacle at a price of C$11.30 per share, valuing Pinnacle at C$385 million.
The acquisition brings together Drax, which owns the world’s largest sustainable biomass power station in the UK, with Pinnacle, a global producer of high-quality compressed wood pellets. This Canadian-UK combination will be positioned as a leading sustainable biomass supply and power generation business.
Drax already owns and operates wood pellet mills in the Southern US and, with the addition of Pinnacle’s 11 sites, will own a total of 17 pellet plants and development projects. This will give Drax the capacity to produce 4.9 million tonnes of biomass wood pellets annually from 2022, with access to four deep water port facilities and three major wood fibre baskets.
Drax is the largest decarbonisation project in Europe having converted the UK’s biggest coal-fired power station to use sustainable biomass, delivering carbon savings of more than 80%.
As the UK’s biggest single-site renewable electricity generator, Drax produces enough renewable electricity for four million homes. Drax’s world-leading sustainable biomass sourcing policy goes beyond UK and EU regulations and aims to drive up standards globally. It will use pellets produced at the Pinnacle facilities in its UK power station, ensuring it has a cost-effective supply.
Drax is committed to ensuring the safe, efficient and sustainable operation of the enlarged group’s activities and intends to invest in Pinnacle accordingly to deliver this outcome.
Will Gardiner, Chief Executive Officer of Drax, said: “I am excited about this deal which positions Drax as the world’s leading sustainable biomass generation and supply business, progressing our strategy to increase self-supply, reduce our biomass production cost and creating a long-term future for sustainable biomass.”