"Danger of Death! 400,000 Volts.” Dorothy Thompson is unfazed. “These are the boots I usually wear to walk the dog,” she says, almost oblivious to the tree-trunk-sized cable overhead, which feeds 7 per cent of Britain's electricity supply to the National Grid.

Ideally, perhaps, she would be marching across the nearby Yorkshire Moors, within striking distance of her weekday flat in York, but today the chief executive of Drax Power is at work and the sprawling Drax site near Selby, where six giant turbines churn out nearly 4,000 megawatts of electricity, offers a rather more prosaic backdrop to a morning outdoors.

As she talks, Drax's 12 vast cooling towers, their rims encrusted with soot, loom large behind her, monuments to Old King Coal, driver of the Industrial Revolution, bête noire of the modern environmental lobby.

“As a long-term fuel, it's hard to envision a world without it,” Ms Thompson says. “It's just too difficult to replace. The UK shouldn't give up on its old coal stations too quickly.”

But coal comes with caveats. Or rather one big one. Drax's furnaces gobble up ten million tonnes of the stuff a year, a trainload every 45 minutes when running at full pelt — and in 2006 the plant spewed out nearly 18 million tonnes of carbon dioxide, making it easily the UK's largest single source of greenhouse gases, one of the biggest in Europe. Thus Ms Thompson, keen hiker, boss of Britain's biggest power station and the only woman to head a FTSE 100 power company, is intent on turning a coal-fired monster like Drax into a model of clean, green energy.

“We recognise that we emit a lot of carbon, but that does not mean we are not trying to address it,” Ms Thompson insists. “There is a real recognition that we have to solve the carbon problem.”

Last year she began a programme to convert Drax's mammoth boilers to run on wood, straw — even sunflower husks and olive pips — as well as coal.By June 2010, about one eighth — or 500MW of Drax's 4,000MW capacity — will be produced by burning this biomass, injected into its furnaces alongside coal. Through this, and investments in more efficient turbines, the plant is on track to cut its emissions by 18 per cent by 2012, she says. “We think biomass has great potential.”

Ms Thompson's interest in timber goes beyond the purely professional. In her holidays, she and her American husband are fond of hiking in the thick forests and mountains of the northwestern United States, a striking contrast from Selby's smoking towers and the family home in Islington, North London, where Ms Thompson's husband lives with their two children and which she sees at weekends. “My in-laws live in Boise, Idaho, which is just made for hiking” she says. “We usually go there once a year.”

This love of the great outdoors is unlikely to spare Ms Thompson the wrath of those environmentalists. Sourcing the 1.5 million tonnes of biomass needed every year will be tricky and critics argue that it could create as many problems as it is intended to solve.

Much of the wood will need to be imported, for example, so how can Drax's chief be certain that it is not being ripped unsustainably from forests halfway around the world? And what about the carbon produced from shipping biomass to Yorkshire from Canada, Scandinavia or South America?

“The key for us was to develop a very robust sustainability policy.” She insists that the programme is environmentally sound, although she is cagey about exactly where all of it will come from.

This drive towards greener fuels may play well with public opinion, but there are hard business reasons behind it. Drax, which made a pre-tax profit of £454million on revenues of £1.75billion in 2008, needs to adapt — urgently — to cope with tough new European emissions standards. Under the European Union's emissions trading scheme, life will get more difficult from 2013. Then polluters will have to buy all of their carbon-emission permits, rather than being handed many of them for free.

By burning biomass, Drax is also awarded Renewable Obligation Certificates, which Drax's customers — the big utility companies — are legally obliged to obtain for a portion of their generation.

Yet there are technical limits on how much can be burnt before affecting the plant's efficiency. In the longer term, carbon capture and storage, a commercially unproven technology designed to strip out and lock away carbon emissions, could provide a solution, but for the foreseeable future Drax will rely on the unmitigated burning of coal as its main source of fuel.

Ms Thompson, 48, an LSE graduate and former banker who worked for Powergen and InterGen before her 2005 appointment as chief executive of Drax, is under no illusions that this puts her at odds with the prevailing winds of political and public opinion. But she frets that Britain's energy policy is leading us in a dangerous direction. Given its uncertain economics and its inherent volatility as a power source, there is a limit to how much wind energy can contribute to the overall mix, she believes.

With the public viewing new coal-fired power stations such as Kingsnorth, on the Hoo Peninsula on the northern coast of Kent, as unacceptable and with new nuclear plants to replace Britain's ageing fleet unlikely to come on stream much before 2020, power companies are turning increasingly to gas-fired generation to meet demand at a time when Britain is running short of its own supplies in the North Sea.

“We are rapidly becoming totally dependent on imported gas,” Ms Thompson says.

All of which means that, like it or loathe it, Drax is set to remain a critical piece of Britain's power-generating infrastructure for years to come, providing reliable heat and power to millions of homes until a more sustainable replacement can be developed.Moreover, right now, its assets are being worked harder than ever as ageing nuclear plants are retired from service and older, dirtier British coal plants are forced to operate under restricted hours to meet EU emissions rules that will force them to close altogether by 2016.

Commercially, this has been good news for Drax. It has been earning fat profits in recent years as the UK's margins of spare generating capacity have thinned. Yet Ms Thompson — who spends three days a week at Drax, where the group employs 750 full-time staff on a sprawling 1,800-acre site in North Yorkshire, and another two at the FTSE 100 company's small London office — points out that there are other powerful forces working in the opposite direction.

A steep drop in electricity demand associated with the recession is likely to weigh heavily on Drax's profits this year, although weaker coal prices have helped to provide some relief. This, Ms Thompson concedes, should be good news for consumers, who should benefit from further price falls. “The wholesale market has dropped dramatically. We are witnessing softer demand across the UK economy.”

In that context, yes, but the demands on Drax remain hard, for its power — its furnaces are churning out electricity as resolutely as ever — and for it to achieve the environmental targets that would make that power acceptable to all. It is a challenge that Ms Thompson, with a steely resolve renowned throughout the power industry, is endeavouring to meet head on.

C.V.

Born: November 18, 1960 Married with two children

Education: St Mary’s, Shaftesbury; London School of Economics BSc (Hons) and MSc in Economics

Career: 1983: Works in banking before joining Powergen; 1998 Joins InterGen as head of its European business 2005 Joins Drax as Chief executive. Also a director of Johnson Matthey

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