Mar 04 - Independent on Sunday, The

The politics of energy are shifting. Nuclear power companies used to be prime targets of the environmental lobby. But that was before the world began worrying about carbon emissions. Now, green protesters have turned their ire on the coal industry.

Drax, the FTSE 100 company that owns the coal-fired power station of the same name in North Yorkshire, is very much at the top of their blacklist. It is the UK's largest power station of any kind, producing about 7 per cent of our electricity. It is also Europe's largest coal plant and the single biggest emitter of carbon dioxide in this country.

Hundreds of eco-protesters converged on the power station in August to try to shut it down, the first large-scale action against the coal industry in Britain. At the time, a spokesman for the energy companies called them "daft, dangerous and misguided". But beyond that, the industry - traditionally publicity averse - made little response and was happy to let police deal with the matter.

But now, in her first big interview since the protest, Dorothy Thompson, the only British woman serving as chief executive of a FTSE 100 company, explains how Drax is trying to clean up its image. She admits the coal industry has, in the past, been poor at communicating, particularly on green issues. "We think that probably we need to be a little more open about who we are and what we do."

Thompson, 46, hits out at the protesters and environmentalists who want the UK's coal plants - which provide about 40 per cent of the country's electricity - closed down. "There are people who disapprove of me or other people in Drax because we work in coal generation. I struggle with that very strongly. I have problems with them attacking someone because they are providing what has been proved to be an essential service." And she reveals why last summer's protest - much to its or-ganisers' chagrin - may have ended up doing the company a favour.

Drax reports annual results this week. Analysts predict earnings of around [pound]580m, against [pound]239m in the previous year, thanks largely to the surge in power prices. Aside from strong numbers, Thompson will also announce Drax's ambitious target of sourcing 10 per cent of its fuel from biomass by 2009.

Biomass can come from specially grown energy crops such as miscanthus (a tall grass), oil palms, willow and poplar trees or from bio-wastes such as sewage sludge or the mush left when olives are crushed to make olive oil. Drax is proposing to "co-fire" these biomass fuels with coal. To meet its 10 per cent target, it will require an estimated 1.5 million tons of biomass each year, says Thompson.

The two types of biomass reduce carbon emissions in different ways. Energy crops remove as much carbon from the atmosphere while they're growing as they release when they're burnt, so their net contribution to atmospheric carbon is zero. Bio-wastes release their carbon into the air anyway when they biodegrade, so burning them instead produces extra energy at no extra carbon cost. In both cases, the amount of coal that has to be burned to get the same amount of energy is reduced. Drax estimates that if biomass were fully used by all Britain's modern coal plants, 21.5 million tons of carbon dioxide would be saved a year, or half the savings demanded from the power sector under the first phase of the EU emissions trading scheme.

Biomass is already burnt in relatively small quantities by 16 coal-powered plants in the UK, including Drax. But co-firing has its drawbacks. Currently, the maximum amount of biomass that can be used in the fuel mix is 20 per cent. Beyond that, the plants become too clogged with ash. Depending on coal prices and the kind of biomass used, co-firing is two to three times more expensive than conventional coal-powered energy and needs government subsidy to make it viable.

As with bio-fuels - energy crops mixed with petrol or diesel - there are concerns about the energy needed to grow, transport and manufacture the biomass. A recent report commissioned by the Government found that most biomass burnt in Britain is imported bio- waste rather than energy crops. Much of this waste comes from palm- oil plantations in Indonesia and Malaysia, involving the clearance of vast tracts of rainforest.

Thompson, who has held the top job at Drax since the autumn of 2005, joining from fellow power generator InterGen, acknowledges these concerns but rules out making a commitment to buy biomass only from the UK, where its sustainability can be verified. Where possible, Drax will source its biomass at home, she says. But according to the Royal Commission on Environmental Pollution, if wood chips, say, provided all the biomass needed for Britain's coal plants, seven million out of a total of 17 million hectares of agricultural land would be required to grow enough poplars and willows.

Drax is still working out which type of biomass to use and where to get it from, Thompson admits. "I don't want to give everyone our secrets. We are more nervous about that than you think."

Drax is spending [pound]100m installing more efficient blades on its turbines and is looking at whether the carbon released during generation can be captured and stored in nearby coal mines. But environmental campaigners are less than impressed with such efforts. They point out that, even if Drax uses 20 per cent biomass, it will still emit more carbon than modern gas plants. "Co-firing will just prolong the life of the coal industry," a Greenpeace spokesman says.

Yet Thompson seems genuinely concerned about climate change. She was moved by Al Gore's eco-horror documentary, An Inconvenient Truth. "Who would have thought a movie about climate change would get two Oscars? You should see it." She concedes that coal is dirtier than any other form of power generation. But with old nuclear reactors coming to the end of their lives, it is hardly practical to close down Drax as the campaigners wish. Lakis Athanasiou, an analyst from Collins Stewart, says: "It's a bit daft of protesters to try to shut down the most efficient coal plant in the UK because it would result in much less efficient coal plants being used more to make up the shortfall."

In fact, Thompson reckons, last summer's protest helped Drax to lobby for government support for co-firing and carbon capture and storage. "People's concerns with climate change echo our concern. Yes, they did us a favour in a backhanded way."

She is astute enough to realise the protest is unlikely to be a one-off: "Whether they'll choose Drax as a venue [again] I don't know." Asked if she thinks that communicating with the public will make the company less of a target in the future, she concludes: "One can but hope."

(c) 2007 Independent on Sunday, The. Provided by ProQuest Information and Learning. All rights Reserved.