The Green Investment Bank (GIB) has defended its investment in the conversion of parts of Drax power station into biomass after campaigners questioned the sustainability of the project.
In 2012, the bank invested £100m to convert three generation units of the Selby-based facility from coal to biomass. The commitment was then decreased to £50m as Drax refinanced half of the funding with private sector investments.
A group including organisations of local residents, Biofuelwatch and Friends of the Earth Bristol, delivered an open letter expressing concerns over the project to the GIB during the institution’s two-year review conference (photo above) in London.
The campaigners urged the bank to revoke its funding, claiming the project had “serious adverse effects” on carbon emissions and the environment as a result of the high amount of wood pellet needed to power the biomass units: 16 million tonnes or 160% of the UK’s annual production.
“The loan to Drax Group clearly conflicts with the GIB’s purpose of supporting low-carbon and sustainable investments and undermine its credibility as an environmentally responsible investor,” they wrote.
GIB chief executive Shaun Kingsbury stood by the sustainability of the development saying that the bank applied rigorous scrutiny to environmental impacts.
“We conducted detailed due diligence, we collect data on sourced biomass and we get that audited by PwC. We ensure the green credentials of projects to the same level as we do financially,” he said.
GIB head of sustainable finance Gavin Templeton said the bank only committed to projects where the greenhouse gas emissions intensity of the supply chain was below 200kg of CO² per MW/h, as stipulated in Government’s policy on renewables, which is set to become mandatory in 2020.
“On the wood quality issue, we make sure - and it’s independently verified and ensured - that all the wood is from sustainably managed forest and there is evidence of surplus availability,” he added.