a division of NEPIC

Investment Activity

Current and Planned

The market for a low carbon economy in the UK is being driven by a number of factors. Under the European Renewable Energy Directive (RED), each member state has its own targets. For the UK, by 2020 the UK has a target to achieve 15% of its energy consumption from renewable sources. Legislation in the UK, initially by the Renewable Obligation providing financial incentives in generating electricity from renewable sources, followed by the Renewable Transport Fuels Obligation (RTFO) which seeks by 2020, to ensure that 10% (by energy) of UK transport fuel is derived from renewable sources. The UK Government also incentivised renewable heat during the course of 2011.

Increasing consumer acceptance and demand for natural products, along with increasing demonstration of performance against fossil fuel derived products and the realisation of the role of biomass products in contributing to greenhouse gas (GHG) emissions targets have led to an expansion of the biomass using industry in recent years.

Driven to a large degree by the North East Process Industry Cluster (NEPIC), the Tees Valley has seen significant levels of investment activity in recent years. This has been driven by the co-location of large-scale petrochemical industry and an extensive agricultural hinterland.

In terms of renewable fuels Crop Energies (formerly Ensus Group) at Wilton is the largest wheat based biorefinery in Europe taking in as its feedstock in excess of 1 million tonnes of high starch animal feed wheat. Biodiesel production in the North East is courtesy of Greenergy at Seal Sands acquiring the facility in January 2015 from Harvest Energy. The acquisition of this asset gives Greenergy additional biodiesel production capacity with which to meet its own renewable fuel blending obligations.

The UK’s first biomass to power plant operated by Sembcorp at Wilton (known locally as Wilton 10) is now operating CHP status. Veolia (formerly Dalkia) are operating a 17MW facility in County Durham and in this sector, MGT announced (July 2015) the green light for its landmark £650M plant at Teesport. Work could start by the end of 2015 with the plant creating 600 construction jobs and a further 100 permanent jobs. Additionally, Gaia Power have both indicated future operational intent in the North East. Furthermore, a joint venture is underway between Sembcorp and SITA to build a 40 MW plant at Wilton. The plant known as Wilton 11 is currently under construction and will divert 440K tonnes of office and household waste per year from landfill. Commercial operation is expected during 2016.

Air Products is currently building the most advanced plasma gasification facilities in the world. Situated in the Tees Valley at Seal Sands the 2 renewable energy plants will convert waste to electricity. The combined facilities will generate approximately 100MW combined, enough to power over 100,000 homes and divert over 700K tonnes per year of non-recyclable waste from landfill. These are significant investments and the project will further strengthen Tees Valley reputation as a skilled technology hub whilst generating green technology jobs - over 1500 construction jobs and 100 permanent positions. These assets will have some of the lowest carbon emissions of any power-generation facilities at a little over 50g/kWh (grams per kilowatt hour).

Anaerobic digestion features strongly in the drive towards a long term sustainable future. Treatment work has commenced at Northumbrian Water’s site at Howdon, North Tyneside converting sludge remaining after sewage treatment into green electricity. The £34M investment complements the firms existing advanced digestion plant installed at its largest works at Bran Sands on Teesside. Diverting food waste into valuable new commodities is the core business of Emerald Biogas, the North East’s first commercial food waste anaerobic digestion facility. The £8m facility has been designed to recycle food waste - leftover and unsold products - generated by commercial organisations including food manufacturing companies, retailers, schools and leisure outlets amongst others.

This investment activity is further complemented and underpinned by North East investments into biopolymers, biopharmaceuticals and the recycling by Biffa Polymers of rigid mixed plastic polymer into food packaging. Nova Pangaea’s technology allows for the complete fractionation of lignocellulosic materials into their constituent parts. Construction of a demonstration plant is planned for the Wilton chemical complex in the Tees Valley. Add to this, the fact that Mitsibushi Chemical is now manufacturing a key component for electric car batteries in support of the Nissan Leaf electric car and its associated supply chain, it is clear that low carbon manufacturing and the green economy is already a major industry in North East England.

EDF Energy Renewables’ Teesside Offshore Wind Farm near Redcar in the Tees Valley is the first offshore wind farm where the development, engineering and construction have been entirely led by EDF Group companies. Its 27 turbines can produce 62MW of electricity, enough to supply all the homes in Redcar, Marske and Saltburn. JDR cables, of Hartlepool, and Tekmar, of Newton Aycliffe, are two world-leading companies supplying the offshore wind sector supply chain and 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.

Given what has been achieved to date, and the region’s assets and infrastructure, there are strong possibilities for further high impact investment opportunities, thereby further reducing the carbon footprint of UK Industry and further promoting the North East green economy as an exemplar of low carbon manufacturing. 

The Tees Valley and North East Hydrogen Partnership has been formed to construct a North East Hydrogen strategy which in turn can build a long term sustainable regional Hydrogen economy. Hydrogen fuel cell electric vehicles (FCEVs) have recently met technical targets for commercialisation and in the UK, Transport for London is operating 8 hydrogen buses and have had 15 hydrogen fuelled taxis operating since the London Olympics. Additionally, the city of Aberdeen is operating 10 hydrogen fuel cell buses. This is an emerging commercial sector with high growth potential and the Tees Valley and North East Hydrogen Partnership believes it is uniquely well positioned to build a business case not only in transport but in a wider industrial context. Hydrogen will be a major part of decarbonising the UK transport sector as it anticipated that by 2050, a significant proportion of UK cars will be FCEVs and it offers significant opportunities for developing a low carbon energy based manufacturing sector in the North East of England.

Although current and planned investment in North East England is a very sizeable level of activity in any European or UK context,  more needs to be done in order to secure further economic growth, increase de-carbonisation of UK manufacturing and help meet legislative targets. This will require the support of financial markets and strategic investors to secure the capital investment required. Other potential projects remain in the pipeline. This includes 2 process industry game changers, industrial carbon capture and storage (CCS) and underground coal gasification (UCG).  In respect of industrial CCS, the newly formed Teesside Collective (www.teessidecollective.co.uk) is building on the work of NEPICs Process Industry Carbon Capture Storage Initiative (PICCSI). Teesside Collective is a cluster of leading industries in combination with Government (DECC) and local LEP (TVU) with a shared vision: to establish Teesside as the go-to-location for future clean industrial development by creating Europe’s first Carbon Capture and Storage equipped industrial zone. It is a pioneering infrastructure project incorporating 4 capture sites in SSI, Growhow, BOC and Lotte Chemical representing the opportunity to cut CO2 emissions by up to 5 Million tonnes a year by the early 2020s. The project would help future proof local industries from the rising costs of emitting CO2, maintaining a competitive edge, bring about substantial growth in the process industry, turn the Tees Valley into a global exemplar and act as a catalyst for inward investment.

UCG in Northeast England is being led by Five Quarter (5Q). The global decline in hydrocarbons is leading to exploitation of unconventional gas sources. For the chemical industries, there is an urgent need for new, inexpensive and plentiful gas feedstocks close to production plants. The technology known as Deep Gas Winning, (Deep Gas Winning™) the process involves gasifying seams of coal, thousands of feet under the sea, by delivering steam and oxygen through a six-inch diameter borehole from a surface drilling platform. The technology can accommodate CCS. There is little doubt that commercially available gas from this technology is another process industry game changer.

North East Bioresources & Renewables, c/o NEPIC, Room H224, Wilton Centre, Wilton, Redcar, TS10 4RF | T +44 (0) 1642 442 560