Later this year a £250m Energy from Waste (EfW) plant will open in Billingham. It is the first of its kind in the world, and a further two Teesside EfW schemes are set to follow next year.
Plans for two new biomass plants, valued at more than £650m, are well advanced and these are taking place as renewed efforts are under way to develop carbon capture and storage (CCS) facilities to protect some of Teesside’s major industrial plants from rising carbon taxes.
At the height of last decade’s recession, things looked bleak for Teesside, with Dow Chemicals, Petroplus, Artenius and Croda all closing plants with the loss of hundreds of jobs.
But Teesside’s inherent strengths – a formidable industrial infrastructure, scientific knowledge, a suitable workforce, and planners and a local community willing to embrace heavy industry and recycling on a massive scale – make it an appealing location for energy developers.
US gases giant Air Products is in the process of investing more than £500m on two new EfW plants north of the Tees in Billingham.
Its Tees Valley 1 (TV1) facility is well into its start-up phase and will begin operations later this year, with Tees Valley 2 expected to start in 2016.
Andrew Connolly, operations director for Air Products’ Tees Valley projects, said: “The main reasons Air Products chose to invest on Teesside were because of the good access to electrical infrastructure, the excellent road and rail links and the skilled workforce in the region.
“The TV1 facility will provide around 49.9mw each of renewable electricity, generated from non-recyclable residual waste that would have previously been destined for landfill disposal.
“With the location of Air Products’ two large-scale advanced gasification facilities in Teesside, the North East of England is leading the way towards the sustainable production of energy from waste in the UK.”
Tees Valley Unlimited (TVU), the local enterprise partnership, says that in the past 18 months, £410m has been invested in Teesside’s energy sector, creating 200 permanent jobs and 700 during construction.
It says further investment of more than £1bn is expected in the coming months, creating an additional 1,500 jobs
While the green credentials of biomass are under close scrutiny, this is not deterring investment with generous renewable subsidies on offer to support its development.
Sembcorp’s Biomass Power Station (Wilton 10) was the UK’s first ever large-scale wood-to-energy power facility. The UK’s largest coal-fired plant, Drax in Yorkshire, has subsequently converted some of its load to biomass and further north two major projects are planned on Teesside.
MGT Power has been assured of Government support for its £400m Tees Renewable Energy plant. This is earmarked for the south bank of the Tees between Redcar and Middlesbrough. Meanwhile, Gaia Power has earmarked a site on the Billingham Reach Industrial Estate with a 50mw output (see graphic).
TVU says the area is ideally suited for this type of project as it has two major ports serving Scandinavia, well-managed forests in the region to provide sustainable timber and an advanced logistics network.
Stephen Catchpole, managing director of TVU, said it has developed a Low Carbon Action Plan to support the energy sector.
“Our aim, by continually developing initiatives, is to make the area a leader in biofuels and low-carbon technology.
“TVU are developing a comprehensive strategic plan to decarbonise industry, improving energy efficiency by using different feedstocks and improving the integration between different operators.
“We have worked alongside the local authorities and the private sector to bring about the City Deal, which aims to transform the Tees Valley from one of the highest carbon density areas in the UK, to the exemplar of low-carbon manufacturing for the future.
“We have a dedicated business investment team which will assist with finding the right location and acquiring funding for potential investors.”
The new Air Product’s plants have some of the lowest carbon emissions of any power-generation facilities at a little over 50g/kWh (grams per kilowatt hour), compared to coal which emits 850g/kWh.
The global drive to cut emissions has led to the imposition of carbon taxes, such as the Carbon Price Floor (CPF) which was introduced by the Government in 2011.
This levy has increased costs for Teesside’s energy-intensive industries and moves are now under way create a large-scale CCS project to protect industry from the planned further increases in the CPF.
TVU is leading the Teesside Industrial CCS Network, which includes the SSI steel works, the Growhow ammonia plant, the BOC industrial gases provider and the Lotte PET facility. Between them they have the potential to capture around seven million tonnes of carbon dioxide per year.
Mr Catchpole said: “CCS will be a game-changer for vital industries like those here in Teesside which are major emitters but also major employers. The technology will be a crucial part of decarbonising the UK economy, while also maintaining a strong industrial base, jobs and competitiveness.”
Developments such at this will be vital to support the long-term future of members of the North East processing Industry Cluster (Nepic), which represents more than 500 North East businesses in the pharmaceutical, biotechnology and chemical sectors.
They generate in excess of £10bn of sales and comprise 30% of the North East’s industrial base, employing thousands of people.
Also in the wider Tees Valley EfW sector is the Emerald Biogas anaerobic digestion facility, in Newton Aycliffe, which began operations last year. This is the North East’s first commercial food-to-waste facility.
Meanwhile, in Redcar Biffa Polymers has developed the first integrated washing and sorting facility in the UK that is specifically designed to recycle rigid mixed plastics packaging.
Anyone driving on the A19 north to south arterial road through Teesside cannot miss EDF Energy’s Teesside offshore wind farm, 1.5km north of Redcar, which opened in 2013. The 27-turbine scheme provides 62mw of capacity.
JDR cables, of Hartlepool, and Tekmar, of Newton Aycliffe, are two world-leading companies supplying the offshore wind sector. They are set to play a major role in the next phase of UK offshore wind developments which is set to be worth more than £50bn in the next 10 years.
And there was some good news earlier this year when turbine foundation-maker Offshore Structures (Britain) unveiled plans to create 350 jobs on Teesside when it took over the assets and base of TAG Energy Solutions at Haverton Hill, Billingham.
While the traditional offshore sectors, particularly the subsea contracting community, have taken a few knocks as a result of the recent oil price slump, the area is strong in fabrication with Wilton Engineering and decommissioning with Able UK.
The Tees Valley continues to play a leading role in ensuring there is a pipeline of skilled staff for the energy sector. Last year the Centre for Subsea Technology Awareness, Training and Education – C-State – was launched at Darlington College.
One of the first of its kind in the country, it has been developed by Modus Seabed Intervention Ltd in partnership with Maritime Training and Competence Solutions, Darlington College, Teesside University, TVU and Darlington Council.
Hartlepool College is a provider of high-quality technical education and training to the nuclear and offshore energy sectors with long-established training partnerships with companies such as Wilton Engineering, Heerema and Darchem Engineering.
The Tees Valley is supporting the UK onshore oil and gas industry with last year’s announcement that Redcar & Cleveland College will be part of a new multi-million-pound national training hub.
One of Teesside’s most strategically important energy assets is Teesside Gas Processing Plant north of the Tees at Seal Sands which is run by the px Group. This delivers processed gas to many nearby industrial facilities.
The px Group had previously sold the 1gw Teesside Power Plant to GDF Suez but this was closed down last year with much gas-power generation being priced out of the market by cheap coal imports.
While the ongoing developments cannot compensate for the capacity of baseload power delivered by the Teesside Power Plant they demonstrate the ongoing appetite for investing in Teesside.
Mr Catchpole added: “Tees Valley has the right infrastructure, the right skills and a proven track record of delivering large-scale energy sector projects, creating hundreds of jobs and more than £410m of private investment in the area.
“With £1bn of private investment either planned or in construction, a further 800 permanent and 800 construction jobs will be created over the next 18 months, representing a bright future for Tees Valley in the energy sector.”
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