A Government consultation on the future of the UK energy sector closes tomorrow. Peter McCusker reports on how the sector is poised to lead the UK out of recession and looks set to create thousands of North East jobs.
NEW nuclear power stations - including one at Hartlepool - coal-fired power plants fitted with carbon capture systems to allow for underground CO2 storage, and thousands of wind turbines in the North Sea.
This vision has been touted for some time and has now arrived, Energy Minister Charles Hendry told North East companies last week.
It also has the potential to become the most important driver of the North East economy for generations.
Hendry said: “In just five years, one third of our coal plant will be closed. Much of the rest will have closed by the end of the decade.
“In 12 years’ time, all but one of our nuclear plants is scheduled to have closed. So, the reality is that we need to see more new plant under construction.”
He was addressing delegates at a high-powered conference on the future of the UK energy sector before tomorrow’s closing date for public consultations on the issue and the publication of a White Paper later this year.
He believes the nuclear sector will have a major part to play and could create over 20,000 jobs across the UK over the next 10 years
Hendry added: “We need to see new nuclear plant. We want to make Britain the most attractive place into the world to build new nuclear plants. This will provide amazing opportunities for companies to create new jobs in this region.”
Work is expected to start on the UK’s first new nuclear power station for a generation at Hinkley Point, Somerset in 2013.
It will take seven years to build, will create 5,600 construction jobs and will require a staff of 700 to man it over its 60-year lifespan.
In the next decade the UK is expected to see work start on at least eight new nuclear power stations which will be able to provide over 60% of the nation’s energy needs when fully operational.
Keith Parker, chief executive Nuclear Industry Association, explained that there are opportunities in the market for UK companies, although the reactors will be either American or French. “The UK can supply 70% of the new nuclear plants,” he said. In the offshore wind and renewable sector, Hendry forecasts the creation of 10,000 jobs as somewhere in the region of 7,000 new wind turbines are installed in the North Sea by the end of the decade.
The Crown Estate recently released nine zones for development in the North Sea under the Round 3 programme and three of these – Dogger Bank, Hornsey and Firth of Forth – are close to the region.
Turbines in the nine zones could generate up to 32 gigawatts of power, a quarter of the UK's electricity needs and work is expected to start by 2014.
Dermot Grimson, head of external affairs at The Crown Estate, said: “Of all the regions of the UK the North East is best-placed to gain from the offshore wind programme. It has the supply chain capabilities, a good quality labour supply.”
Delegates to the Energy: A Balanced Future conference organised by NOF Energy heard that the region is well-placed to secure significant levels of work from the manufacture, fabrication, installation, servicing and maintenance of the turbines.
In January, German engineering giant Siemens announced plans to build £100m worth of wind turbine manufacturing plant in Hull, creating 700 jobs, after earlier considering Tyneside as a possible location.
Frans Van Bemmel, technical sales manager offshore at Siemens, says the region should not be discouraged by its choice.
“Hull is where we decided we should be based but there will still be opportunities in the supply chain for North East companies. More importantly the opportunities in the servicing side of the turbines will exist long after the turbines have been built.
“We are not just talking about short-term manufacturing jobs, we are looking at a long-term perspective ... at thousands of jobs for the whole of the UK.”
Neil Kirkbride, chairman of NOF Energy and managing director of Newcastle-based British Engines Limited, is encouraged by the positive noises coming from Government.
He said: “Offshore wind is still some way off, but companies are now positioning themselves for investment opportunities to grow into this sector.
“There has been some uncertainty. There have been some false starts and the recession certainly slowed things down.
“But while it is still in its infancy it is still very encouraging to hear the comments from the minister. The sector offers some excellent opportunities for NOF members in the fabrication and installation sector.
“There are supply chain opportunities for the region’s oil and gas companies.”
:: Click here to see a map of windfarm zones around the UK
George Rafferty, chief executive of NOF Energy, says the skills the region possesses in the subsea oil and gas sector mean the North East is well-placed to secure significant offshore wind investment.
“Oil and gas is here and now, but it’s good to hear the Government give a firm commitment to the renewable energy sector,” he said.
“The skills developed in the region for the recovery of oil and gas reserves will act as a springboard into the nuclear and renewable sectors.”
In October last year the Government announced it was spending £1bn on bringing forward the first commercial carbon capture and storage project. A consortium comprising Scottish Power, Shell and National Grid Carbon has won the contract for a proposed £1bn carbon capture project at Longannet Power Station in Fife, Scotland.
The project aims to capture more than two million tonnes of carbon dioxide per year from the power station and transport it for storage under the North Sea.
Scottish Power believes it can have the equipment working on one of Longannet’s four 600-megawatt units by 2014.
Hendry added: “We are looking at having four carbon capture plants by the end of the decade. We will shortly be announcing the next three schemes to be chosen.” The Government is currently considering nine CCS applications for this scheme, with two of these coming from the North East.
Swindon-based Progressive Energy is looking to develop the schemes at Alcan power station in Northumberland and a new build, coal-fired carbon capture power plant on Teesside.
Further grist to the North East energy mill comes from the help the Government is giving to ports in assisted areas, such as the North East, to carry out improvement to infrastructure.
The Government will publish a White Paper in the next few weeks on reform of the electricity market.
Mr Hendry says the UK energy sector – including oil and gas, renewables, nuclear and other low-carbon sources of fuel – will lead the country out of recession.
He added: “Decisions on the offshore wind sector will have to be made within the next two years. It’s absolutely clear that the North East could be at the focus of these developments.
“It has the ports, the skills base, and the determination.”
“The areas hardest hit by the decline of manufacturing will benefit most from the changing energy market, which will be at the forefront of the nation’s economic recovery.
“The North East stands to gain more than most.
“Companies from across the world are currently looking at opportunities in the UK and the North East. The sort of benefits available to regions such as the North East are completely transformative. This is a once-in-a-lifetime opportunity.
“Low-carbon jobs are the most important driver for the country as we come out of recession.”
