DRAX Power station has bought a major Canadian wood pellet producer for £226million.

The move is part of the energy company’s drive towards green, biomass power generation.

The deal comes just days after the UK’s largest power station near Selby paid tribute to Captain Sir Tom Moore who died last week, by projecting a message from employees ‘saluting’ the fundraiser on a 114m tall cooling tower.

The former Army Captain, who was originally from Yorkshire, raised £32m for the NHS last year by completing 100 laps of his garden ahead of his 100th birthday.

Drax plans to turn off its two remaining coal-generating units in March and move to entirely burning biomass. The deal to acquire Pinnacle Renewable Energy will significantly boost its supply of wood pellets, and cut its cost of biomass production.

Drax said the acquisition would add 2.9 million tonnes of biomass production capacity, while Drax and Pinnacle combined would have 17 pellets plants, three major fibre baskets, and access to four deep water ports.

The acquisition remains subject to Drax and Pinnacle shareholder approval, court and regulatory approvals, but completion is expected in the second or third quarter of 2021.

Will Gardiner, Drax CEO, said: “I am excited about this deal which positions Drax as the world’s leading sustainable biomass generation and supply business, progressing our strategy to increase self-supply, reduce our biomass production cost and create a long-term future for sustainable biomass.

“It will pave the way for our plans to use Bioenergy Carbon Capture and Storage (BECCS), and become a carbon negative company by 2030, permanently removing millions of tonnes of carbon dioxide from the atmosphere each year. Negative emissions from BECCS are vital if we are to address the global climate emergency whilst also providing renewable electricity needed in a net zero economy, supporting jobs and clean growth in a post-COVID recovery.”

Duncan Davies, chief executive officer of Pinnacle, said: “Pinnacle’s Board of Directors has unanimously determined that the transaction represents the best course of action for the company and its shareholders. On closing, the transaction will deliver immediate, significant and certain cash value to our shareholders.

"At the same time, the combination of Pinnacle and Drax will create a global leader in sustainable biomass with the vision, technical expertise and financial strength to help meet the growing demand for renewable energy products, which is exciting for our employees, customers and others around the world.”