UK's Drax opens biomass conversion plant

* Drax is investing 700 million pounds in biomass conversion

* Also plans to build a 426 MW CCS power station

* UK needs new, clean power capacity to replace old facilities

By Henning Gloystein

LONDON, Dec 9 (Reuters) - Britain's coal-fired power producer Drax opened its coal-to-biomass conversion plant on Monday as part of a 700 million pound project to clean up emissions from the country's biggest coal power station.

Drax secured financing at the end of last year enabling a 700 million pound ($1.1 billion) investment plan involving a switch to using wood pellets instead of coal, which produces more carbon for generating electricity than wood pellets.

The biomass conversion will see three of the six generating units at the power station converted to burn sustainable biomass in place of coal.

Each converted unit will provide enough renewable electricity to meet the annual needs of over 1 million homes, Drax said.

"Today marks the transformation not just of our power station, but of our whole business. The facilities being opened today are a unique feat of engineering and remarkably they have been delivered at an operational power station which the country depends on to deliver 7-8 percent of the power we need," Drax's CEO Dorothy Thompson said.

Energy and Climate Change Secretary Edward Davey opened the Drax coal-to-biomass conversion plant and said the government was also awarding a "multi million pound study funding" to support the White Rose carbon capture and storage (CCS (KOSDAQ: 066790.KQ - news) ) project, also based at the site.

"Our coal industry has powered Britain for more than a century, and today we're seeing a clear roadmap for its future... by converting existing coal plants to cleaner fuels, or building state-of-the-art power stations that mean coal is truly clean," Davey said.

Britain needs to build new power generation capacity as it faces a supply shortage later this decade by which time most of its ageing coal and nuclear capacity is retired.

Beyond the coal to biomass conversion, Drax and its partners Alstom (Paris: FR0010220475 - news) and BOC run the two billion pound, 426 megawatt (MW) White Rose coal-fired CCS project.

"We are delighted that our project has been awarded... under the CCS Commercialisation Programme," said Leigh Hackett, General Manager of Capture Power, the consortium that operates the White Rose project, adding that the funding marked a major step in Britain's CCS development process.

CCS is a technology that captures carbon which is generated from fossil-fuelled electricity production and then stores it underground to prevent it from rising into the atmosphere, where carbon emissions are blamed for contributing to climate change.

CCS has been proven to work in several small pilot schemes around the world but has yet to be operated commercially and at a large scale.

"We anticipate up to 12 GW (gigawatt) of CCS could be deployed by 2030, rising to 40 GW by 2050... and provide 22 percent of the UK's energy by 2050," DECC said.