The Drax Power Station and Biomass Energy

This case explores strategic decision-making in an energy sector characterized by intensive government regulation and environmental sustainability concerns. The Drax facility was the largest electrical power plant in the United Kingdom, providing 7% of the country’s electricity. It was also the largest coal-fired power producer – and therefore greenhouse gas emitter – in the UK. In response to governmental policy changes and rising concerns about climate change, Drax management began a conversion away from coal to a renewable source of energy, biomass, and the plant quickly became the single largest biomass-powered facility in the country. The company was making expansive public claims that the plant was generating environmentally sustainable power, but the strategy was not without its critics. A growing set of experts was reconsidering the assertion that biomass was consistent with efforts to reduce greenhouse gas emissions. These shifts in scientific understanding and, potentially, policy threatened the long-term viability of the Drax biomass conversion strategy.