Drax Biomass will begin construction on the first of three 40,000 t/yr satellite wood pellet production plants in Arkansas, US later this month.
The first will be located near a West Fraser sawmill in Leola, Grant County, and is expected to start commissioning in October. In fact, each of the plants will be located next to an existing sawmill and the pellets will be made from sawmill residues, "lowering transport and infrastructure costs", Drax said.
"Drax will also utilise the sawdust and other dry residual materials, which are by-products created when timber is processed, at West Fraser's facility," the company added.
The pellets from the new plants will be transported to Bruce Oakley terminal in Little Rock, Arkansas, before being shipped south to Louisiana and then loaded onto ocean-going vessels.
Drax will begin construction of the two other plants in other locations in the coming months. The company has invested $40mn into the plants as part of its goal to increase its wood pellet self-supply to 5mn t/yr and reduce the costs of its wood pellets to £50/MWh by 2027.
Drax owns, and "has interests", in 17 other pellet plants and development projects across the US, and southern and western Canada, with a combined nameplate capacity of 4.9mn t/yr. A portion of the pellets supply third-party buyers in Europe and Asia, while its pellet mills supply around 20pc of Drax's biomass needs.
Around 43pc of the wood pellets burned at the company's four 645MW biomass-fired units supply was derived from sawmill residues in 2020.
"The rest came from low-grade material such as treetops, limbs and misshapen and diseased trees not suitable for other use, and thinnings", Drax said.
