NORTH Yorkshire power station operator Drax has acquired one of the UK's largest wood pellet distributors as the energy giant takes a share in the domestic bio-renewable market.

The deal comes as Drax prepares to convert a third unit at its power station, near Selby, to biomass burning as part of a £700 million project to switch three of its six units away from coal firing.

Announcing the acquisition of Billington Bioenergy (BBE), bosses at Drax said the move signals the company's intention to enter the country's growing biomass heat sector.

The wood pellet market as anticipated to grow from the current levels of around 200,000 tonnes in 2013, to more than 1 million tonnes per annum by 2020.

Drax Group chief executive Dorothy Thompson said: "This is an exciting opportunity to help transform the UK heat market in the same way we have made the UK power market so much less dependent on high carbon fossil fuels.

"Biomass is a cost-effective, low carbon and dependable source of heat which homes and businesses can rely on.

"BBE is a great business, it shares our customer service ethos and unswerving commitment to sustainability so I am delighted to be working with them."

Drax, which employs more than 1,200 people, has transformed itself into the UK’s largest renewable power generator, and now claims to be a world leader in sourcing sustainable biomass through Drax Biomass.

It also supplies renewable electricity to businesses through its subsidiary Haven Power.

Edward Billington, strategy director at BBE, said: "I am immensely proud of the business we have grown at BBE and would not seek new partners lightly but Drax made it clear that it wants to play a key role to help develop the marketplace for sustainable wood pellet heating for the long term.

"That is a prize that anyone who cares about decarbonisation would want to see.

"Drax remains committed to the network of suppliers and installers, with which we have worked so closely.

"This partnership is very good news for wood pellet heating in the UK, and we are delighted to be working with Drax."

BBE will be continuing to run from its Liverpool office, and all the team and existing arrangements will remain unchanged.