Member Article

Renewable energy shines brightly on the regional economy

Darron Barker, head of Lambert Smith Hampton’s Newcastle office, looks at renewable energy progress in the North East.

Just one month into the New Year two new developments have already been announced within the renewable energy sector – both with the potential to boost the regional economy and create new jobs.

JFS & Associates has agreed terms for five new anaerobic digestion plants in the North East while SITA UK and its consortium partners, Sembcorp Utilities UK and the ITOCHU Corporation, have signed a 30-year PPP (public-private partnership) contract worth approximately £1.8 billion in total revenue over its duration, with the Merseyside Waste Disposal Authority to convert household waste into energy.

Additionally, the construction of Air Products’ advanced gasification energy-from-waste (EfW) plant at Teesside’s Reclamation Ponds site, the largest in the world, is now well underway.

The region is unique in terms of its geography, skills, infrastructure and technical capabilities. It is increasingly regarded as a beacon for advanced technologies; the Tees Valley area in particular has all the right ingredients together with some world scale assets, both operational and in the pipeline.

In the offshore renewables market, Blyth has already earned a reputation among major industry players as a key strategic location - the National Renewable Energy Centre now well established and the lynchpin for positioning the Blyth Estuary Enterprise Zone as a centre of excellence in renewable energy.

And in recent years, with the costliness of landfill tax an increasing burden, many landfill sites are being closed, which has paved the way for waste and sustainable ways to recycle it – thereby encouraging the development of the EfW market.

The Renewable Obligations Certificate, which places an obligation on UK power suppliers to source an increasing proportion of the electricity they supply from renewable sources, is also assisting EfW operators.

Regionally, waste management is a huge area of opportunity. However, it is heavily regulated – the granting of an environmental permit does not necessarily mean that a planning consent will be forthcoming. There can be a wide range of negative local impacts to consider such as increased road congestion, visual intrusion and noise nuisance. And with the life of a site usually only 20 years, together with the rapid pace of technology development, obsolescence could become a problem in the years ahead, which means that as an investment, it could be too risky for many.

On the whole, local planning authorities have been largely supportive of applications because of the number of jobs being created in the sector. Generally, the type of plans favoured are those that make least environmental impact, particularly with regard to emissions, while generating excess energy for alternative uses.

In this regard, SITA in Billingham has been ahead of its time. Now controlling a substantial amount of the municipal waste in the northeast, particularly household waste, it has the capacity in Teesside alone to treat 600,000 tonnes per annum, with two more EfW processing lines under construction.

The most important issue for a new or relocating business to consider is location and this is where it is essential to have knowledgeable commercial agents on board in the early stages of the project – it could mean the difference between establishing a successful business within a short timeframe or getting mired in costly planning disputes and judicial reviews - indeed there are a few waste infrastructure projects in the region which have failed.

With the need to push ahead further and faster on the renewables front, we should count ourselves fortunate to have such a wealth of technology-based talent on our doorstep, supported by an astute professional services sector.

Irrespective of the political, ecological and environmental issues, we currently have an enormous opportunity to contribute to the growth of the regional economy through the decarbonisation of the energy industry and, at the same time, play our part in helping the UK to achieve energy security in the future.

This was posted in Bdaily's Members' News section by Lambert Smith Hampton .