Caring for the environment

Tackling climate change

We believe we have an important part to play in managing the transition of the UK towards a low carbon economy. We fully recognise the challenge that we and other fossil fuel-fired power stations face in tackling carbon emissions and we have already committed to a CO2 emissions reduction programme that will reduce our emissions by over three million tonnes or 15% by the end of 2011.

The focus of our programme is on co-firing and thermal efficiency improvement. On co-firing, we have set ourselves the challenging target of producing 10% of our output from renewable biomass materials by the end of 2009, saving over two million tonnes of CO2 each year. The single biggest challenge in meeting this target is sourcing the volume of biomass material required to produce one-tenth of our output, which is equivalent to the output from around 500 wind turbines.

During the year, we have worked with suppliers of biomass materials to build a strong supplier base and facilitate the development of a supply market for this renewable material.

With a focus on sustainability, we have endeavoured to improve our understanding of the long-term environmental impacts of growing, harvesting and transporting biomass materials. As part of our drive to promote sustainability throughout the biomass supply chain we have been working with our biomass suppliers to incorporate sustainability criteria into our supply contracts in advance of possible regulatory requirements. This approach has been positively received and provides a solid platform for further development in this important area.

At the centre of our thermal efficiency programme is the £100 million upgrade of the high and low pressure turbines of each of our six generating units. The upgrade programme benefited from the early installation of one high pressure turbine module during our outage in the third quarter of the year, giving valuable engineering experience ahead of the double outage in 2008 during which two high pressure and six low pressure turbine modules will be replaced.

On completion of the upgrade in 2011 we will see an improvement in our overall baseload efficiency of 5%, taking it towards 40%, and an annual saving of one million tonnes of CO2.

In addition, we have been involved in research projects with industry partners which have the potential for considerable savings in emissions of CO2. We are also participating in Yorkshire Forward’s initiative to examine the potential for carbon capture and storage infrastructure in the Yorkshire area.

Taking these initiatives forward, and others like them, is only possible within a regulatory framework which is both certain and predictable. Given the right framework, investment in clean coal technologies which will put the UK on a sure path to a low carbon future, whilst delivering reliable and secure supplies of electricity, will be incentivised.

Environmental performance and compliance

We recognise our responsibilities to society and the environment and we are committed to furthering the environmental leadership position we hold in the coal-fired sector. Where practicable we work towards reducing the environmental impacts of our business, in line with our policy to regard compliance with legislation as a minimum level of achievement.

We manage our environmental compliance under an Environmental Management System (“EMS”). During the year our EMS was externally audited and we were successful in achieving re-certification to the international standard ISO 14001: 2004.

We freely discuss our environmental performance and activities with our stakeholders and are sensitive to their views and concerns. Amongst our staff, business partners and contractors we promote environmental awareness, ensuring that they understand the environmental aspects of their activities, that they act responsibly and are competent to undertake their duties.

Over the last few years, UK industry has been moving towards Pollution Prevention and Control (“PPC”) regulation, which replaces the former Integrated Pollution Control (“IPC”) and Waste Management legislation and covers not just the discharges from site, but site issues such as contamination, wastes, odour, noise, energy efficiency, risks, accidents and management systems. The new legislation places greater focus on individual performance through a requirement for staff competency.

In 2004, we applied for a PPC permit to replace the Waste Management licence for the ash disposal site. In 2006, we applied for a PPC permit for the main power station site to replace the IPC authorisation. Both of these permits were received during 2007, and as a result we have commenced a programme of staff re-training to reflect the wider scope of the new regulations and procedures.

Emissions to air

The principal emissions from burning coal are CO2, sulphur dioxide (“SO2”), nitrogen oxides (“NOx”), and particulates (“dust”). Our generating units have all been retrofitted with flue gas desulphurisation (“FGD”) equipment which removes, on average, at least 90% of SO2 emissions before the flue gas is released via the chimney into the atmosphere.

We maintain investment in our emissions abatement equipment and consider this to be a high priority. Our FGD plant already complies with SO2 emissions limits to 2016 and we are nearing completion of a programme of retrofitting all units with low NOx technology – Boosted Over Fire Air – in line with the NOx requirements of the Large Combustion Plant Directive (“LCPD”). Currently five of our six units have been retrofitted with work underway to complete the remaining unit by mid-2008.

Discharges to water

Procedures are in place to ensure that all discharges and drainage to water are monitored and treated where necessary to meet our discharge consent limits. There are a number of sources of discharge and drainage as part of the electricity generation process, including the cooling water used to cool the condensers, which as part of the steam cycle condense steam to water after it leaves the turbines and before returning to the boilers. The FGD process produces effluent water which is treated in a specially designed plant before it is discharged to the river, and there is also drainage from the main plant, coal plant and roads.

Water is abstracted mainly from the River Ouse and boiler feedwater originates from two boreholes on site. Approximately half of the water is returned to the River Ouse at a few degrees warmer than the river water.

Disposals to land

When coal is burnt, ash is left as a residue. The finer particles of ash, pulverised fuel ash (“PFA”), are collected from the flue gas by electrostatic precipitators; the heavier ash, furnace bottom ash (“FBA”) falls to the bottom of the boiler. The majority of ash is sold to the construction industry with the remainder sent for landfill at the power station’s adjacent ash disposal site, which over time has been developed into farmland, woodland and wetland features providing a haven to many species of wildlife and birdlife.

During 2007, we sold some 75% of our ash; our target is zero ash landfill. The construction of an ash rail loading facility will help us to improve our ash export capability through providing greater and more efficient access to construction markets around the country.

We pay landfill tax on the PFA disposed of to the ash disposal site. Through the Landfill Tax Credit Scheme, we are able to claim a tax credit against our donations to recognised Environmental Bodies. We have worked with Groundwork Selby since 2001 on projects designed to help mitigate the effects of landfill upon our local community. During 2007, we contributed approximately £89,824 towards local community-based projects designed to bring about sustainable environmental benefits and contribute to the social and economic regeneration of the area.

Alternative fuels

To help maintain our vital role in the UK economy and safeguard cost effective power production, our fuel strategy recognises the need to sustain a ready supply of traditional quality coal and how best to incorporate alternative fuels, including different fossil fuels and renewable materials. The choice of fuels has to be balanced with availability and flexibility of supply.

The trial burn of petcoke, which concluded in June 2007, was an integral part of our strategy of developing alternative fuels. It involved burning a blend of coal and up to 15% petcoke on one of our six generating units.

Petcoke is derived from the petrochemical industry and is produced from oil, it contains higher levels of sulphur than coal but the FGD plant at Drax ensures that, on average, at least 90% of the SO2 is removed before the gases created during combustion are emitted into the atmosphere. Because of this we have the capability to burn petcoke within the permitted sulphur levels set for the power station by the Environment Agency.

The combustion trial commenced in June 2005, although designed to last for 18 months the trial was extended by a further six months to allow for some additional environmental monitoring. A considerable amount of environmental data has been collected and analysed, where possible using independent specialists. In line with our policy on openness and transparency all data have been made publicly available.

The results of the trial have provided conclusive evidence that there is no detectable impact on the environment through burning blends of coal and up to 15% petcoke at Drax. We believe the results strongly support our case for full commercial burn of coal/petcoke blends across all six units.

Reduce, reuse and recycle

In line with the new PPC regulations, we have stepped up our focus on the handling of wastes through embodying the philosophy of “reduce, reuse and recycle”. During the year, a new recycling centre was constructed and the range of materials recycled was expanded. Monitoring our performance showed that an impressive 76% of all our wastes were recycled in 2007.

Our plan is to focus our efforts on the remaining 24%, with greater emphasis on office-based wastes.