Few issues around business generate more heat than its treatment of the environment. Electricity is a must-have to keep the wheels of commerce and public life turning, but pressure groups line up to promote green energy and attack those using polluting coal and gas.
Drax, the company named after the vast power station complex it runs in Yorkshire, is notorious among environmentalists for being one of the biggest polluters in the country. It operates two coal-fired generators which belch filthy smoke into the atmosphere.
But the firm is working hard to shift its status as green activists’ Public Enemy Number One. Alongside those two coal-fired units are four which it switched from the black stuff to biomass; wooden pellets made of waste timber and sawdust from US forests.
The plan is to change at least one of the remaining coal sites into gas, switching off coal altogether by 2023. Furthermore, it has just spent more than £700 million buying a major slug of hydro-electric power operations from Scottish Power, giving it another tick in the green box.
Though the environmental lobbyists applaud the end of coal, they remain suspicious of switching to gas, which they say will still spew carbon into the atmosphere. They are also far from happy about biomass, and skilfully lobby parliament on both issues.
With all that Westminster wrangling, it’s fitting that the new chief executive of Drax, who pulled off the Scottish Power deal, is steeped in handling competing political arguments.
Will Gardiner, 54, is the New York-raised son of an intellectual Democrat mother and Wall Street Republican father. A staunch liberal, he says, politics-wise, his Upper East side childhood was like having “an angel on one side and a devil on the other”.
An early memory is the 1972 election when George McGovern was defeated by Richard Nixon. “One half of the family was extremely excited and the other extremely depressed.”
The New York Jets fan boarded in the rough and tumble of Groton school, the Boston alma mater of Franklin D Roosevelt, before taking Russian and Soviet studies at Harvard. “It was the peak of the cold war, and Ronald Reagan was rattling sabres, so I thought it was pretty important to understand why,” he says.
From there, it was to Citi and JPMorgan, advising on takeovers and privatisations in turbulent Latin America.
“The work was all about how you can build bridges between different worlds and help them understand each other. Fascinating,” he recalls over sandwiches at Drax’s small City HQ.
His words are rapid but softly spoken, often slipping into a Manhattan mumble. Colleagues past and present say he’s a good listener, but can be abrupt when he disagrees or scents waffle.
Although he’s less than a year into the job, Gardiner had a decent run-up as finance director to his predecessor Dorothy Thompson. Gardiner says he was more of a “co-pilot” to the chief executive than a mere numbers guy. He’d previously filled a similar role riding shotgun at the semiconductors designer CSR, according to his boss at the time, Joep van Beurden.
He and wife Beth, an NBC News producer-turned-art historian, have lived in Earl’s Court for more than 15 years. They have three children, aged from 12 to 20. Culture vulture though he is, Gardiner is also a sports nut, as likely to be found at Spurs as at the Royal Ballet.
But back to his day job. Environmentalists argue he is only moving into hydro electric now because he has to. They have a point. Old King Coal is being deposed. The government has committed to end coal generation in seven years. Meanwhile, taxpayer subsidies Thompson negotiated biomass (total £800 million last year) end in 2027.
Gardiner has to diversify. “Futureproofing is a big part of what we’re doing,” he says. “You sit there and think: what are the things about Drax that I don’t like? Most of its earnings come from one place, one income stream. That’s an uncomfortable place to be.” He got a sharp lesson in that last year when a fire on a biomass conveyor belt burned 9% off Drax’s share price.
For the first time, the Scottish Power deal will take Drax into low-carbon generation methods like pumped storage, where water is pumped to a reservoir at the top of a mountain at night using cheap-time electricity, then released down through turbines in peak demand times.
It means coal will become an ever smaller part of Drax’s energy mix. However, while he likes the clean energy the deal brings, Gardiner is proud of the non-renewable parts of his business.
In fact, the Tesla driver claims he took the job because he felt Drax could help the world meet the climate change targets set by the Paris accord. How? Because, as scientists on the Intergovernmental Panel on Climate Change put it recently, though 85% of the UK’s electricity will eventually be generated by wind and solar, 15% will still need to come from other, more reliable sources.
“Most energy companies are very focused on the 85%. But there’s a real opportunity in the other 15%,” says Gardiner. “There are going to be lots of times when the wind’s not blowing and the sun’s not shining. There needs to be some fuel or power to do that which is low or net-zero carbon.”
Biomass, he says, is the key, accompanied by gas for a 20-to-30-year handover period.
Environmentalists argue biomass still creates carbon emissions in the burning process, while harvesting the wood damages the world’s forests too. Not to mention the fact that Drax imports its pellets from the South-east of the US, running up environmental costs transporting to ports in Liverpool and the Humber.
Gardiner has a ready armoury to counter the claims. First off, he says, Drax gets its wood from offcuts being harvested for housebuilding and furniture. “These are trees that were going to be chopped down anyway,” he says. Besides, he adds, the forests are managed sustainably, with double the number of trees planted than are chopped down.
And on the Co2 factor? “The amount of emissions in the whole production process, including transport,” he says, “is about 15% of coal’s emissions. Yes, there are emissions, but far less than if we were just burning coal.” Gardiner has also teamed Drax with a Leeds university spin-out company to try to capture the carbon, using some of them to create Co2 for fizzy drinks and beer or mixing it with hydrogen to create petrol. Cheers to that.
Why does Drax have to ship the wood from so far away, I ask, somewhat naively as it turns out. Why not use British timber? “Well,” he says patiently, “we use more wood than the entire annual forest harvest in the UK. So there’s a bit of a scale problem there. The US forests we use are something like three times the entire landmass of Britain.” Point taken. Speaking of raw materials supply, I wonder what his view is of our energy security. Drax’s planned move into gas will add to our reliance on foreign suppliers. Currently, we use largely Norwegian and British gas, but some fear we’ll eventually have to rely on Russian supplies like much of Europe.
As a Russian scholar, what does Gardiner think of that? “Hmm. Don’t… trust… the Russians,” he declares, conspiratorially. I think he’s joking, but I’m not sure. One thing’s certain, he’s no optimist about UK fracking. While extracting gas from rock has revolutionised the US energy scene, in Britain, fears of earth tremors and pollution have sparked so much protest that projects have struggled to get off the ground.
“In the US, when business wants to do something they can just do it. It doesn’t feel like that’s the case here. When significant proportions of the population decide onshore wind is not what they want, they stop it, right? I don’t think that’s necessarily a bad thing, by the way, as long as it’s balanced.”
Environmentalists are training their sights on Drax’s plans to turn its coal generation into gas. Handling those voices will be the toughest test yet of Gardiner’s political skills. He’ll be hoping that, unlike the election of Tricky Dicky Nixon in ’72, this time his team wins.