1. BLOG

Drax power plant

I read with interest an article published in the Guardian on 25th February, suggesting that it is Greenwash to put plans on hold for biomass investments until it is clear that these investments will generate a suitable return. As an active supporter of developing biomass supply chains internationally, with interests in Africa and South America, I am a little perplexed by this argument. To extend the point, seems to suggest that farmers in Africa should invest in their land, even if it doesn’t make them any money. Likewise, growers in South America should invest more in their existing land and not expand into the much cheaper scrubland, even though they won’t make as much money. Is it ok for suppliers of coffee beans to lose money?

The argument is often difficult as some parties offer a view that large commercial operations shouldn’t make money, but poor farmers should. These views can reduce supply chain investment returns, whether the investor is subsistence farming on very short payback cycles or making investing multi-million investments in assets that will not generate a return for many years.

It has long been by view that we need all actors in supply chains to make reasonable returns in order for supply chain investments to be truly sustainable. So, it seems reasonable that those pension funds that invest in Drax shares should expect a reasonable return, just as it is reasonable for farmers to expect a return.

My final point relates to the role of Government in securing the market to enable such investments. There have been a catalogue of changes of pace or direction from Government relating to renewable energy. In such circumstances, those who seek to invest, like the farmer, look for shorter payback timescales. Therefore, Government should perhaps consider taking a more consistent approach to policy setting in order to allow developers like Drax and the investors who place our pensions time to both understand the policy framework, and produce appropriate solutions. It seems perfectly reasonable to ask developers and investors to assure the sustainability of the solutions they produce, but I for one hope my pension will provide for me and my family when I retire.