Ambitious plans putting the North East at the heart of the UK’s energy security, creating 5,500 jobs, are a step closer with the Government confirming support for a £1.5 billion scheme.
Net Zero Teesside is set to become the world’s first gas-fired power plant with carbon capture and storage facilities, producing up to 860 megawatts of electricity, enough to power around 1.3million homes per year.
Rishi Sunak and Energy Secretary Grant Schapps have today (Thursday March 30) confirmed plans to increase ‘clean’ power production by building thriving green industries to secure energy independence and reduce bills in the long term.
It comes as Russian president Vladimir Putin’s illegal invasion of Ukraine continues to devastate global energy markets, forcing up wholesale prices and energy bills of households and businesses in the UK and around the world.
But the Northern Powerhouse Partnership has suggested the Government could be ‘playing political games’ instead of making smart decisions on the economy and national aims regarding decarbonisation.
The Prime Minister said: “When global energy supplies are disrupted and weaponised by the likes of Putin, we have seen household bills soar and economic growth slow around the world.
“We have stepped in to shield people from its worst impacts by helping to pay around half the typical energy bill.
“But we are also stepping up to power Britain and ensure our energy security in the long term with more affordable, clean energy from Britain, so we can drive down energy prices and grow our economy.
“That’s why we’re driving forward plans to boost renewables, revive nuclear and build new thriving industries like carbon capture, which will in turn create good jobs across the country, provide new opportunities for British businesses at home and abroad, and maintain our world-leading action to reach net zero.”
Up to two million tonnes of CO2 emissions from the new power station on Teesside will be captured per year and transported offshore for storage.
The investment scheme, driven by a consortium of energy companies led by BP, will represent ‘ground zero’ for clean industry in the UK.
The East Coast Cluster, including NZT, was named one of the UK’s first two CCUS clusters in October 2021 following a successful bid in Phase One of the Government’s process.
Alongside this, BOC’s Teesside Hydrogen CO2 Capture scheme, also part of the East Coast Cluster, plus BP’s H2 Teesside and Kellas Midstream’s NorthEastH2 hydrogen production projects have also been given the go-ahead by Government to move into Phase Two, making Teesside the centre of the UK’s decarbonisation ambitions.
Tees Valley Mayor Ben Houchen said: “Teesside has always been a world leader, first with steel, now with green technology and decarbonising industry – other areas across the country talk about it, the difference here is, we crack on and deliver it.
“Net Zero Teesside will be the first industrial scale project of its kind in the world, providing energy security to the UK, meaning cheaper bills for hard working people, whilst helping us meet our environmental targets nationally - it really is win, win.
“Projects of this scale don’t happen overnight, we have spoken for some time about the enormity of this project and today marks an historic day where this monster £1.5billion project takes a giant leap forward to becoming a reality.
“We have always had the people and the skills, now we have the jobs and investment to match and I’m pleased that’s been recognised by the Government as the UK’s clean energy powerhouse.”
Adding to Teesside’s green credentials is the world’s biggest, £450million, offshore wind turbine monopile manufacturing plant, now being constructed by SeAH Wind Ltd on Teesworks.
The site, the UK’s largest industrial zone and heart of the Teesside Freeport, is also rumoured to be the front-runner for a Rolls-Royce facility producing key components for nuclear plants.
As well as providing ‘net zero’ power for multiple applications, these will also help provide energy for the manufacture of green hydrogen.
A decision on the final location is, however, expected to still be some way off.
Energy Security and Net Zero Secretary Grant Shapps said Net Zero projects worth £3billion have now been approved, days after Chancellor Jeremy Hunt committed £20billion to the sector in the Budget.
Mr Shapps said: “Access to cheap, abundant and reliable energy provide the foundation stone of a thriving economy with our homes and businesses relying on it to deliver our future prosperity.
“Following our unprecedented cost of living support this winter, which continues, this plan now sets out how we fix this problem in the long term to deliver wholesale UK electricity prices that rank amongst the cheapest in Europe, as we export our green growth expertise to the world.”
The news has been welcomed by Teesside Tory MPs Simon Clarke, who represents Middlesbrough South and East Cleveland, and Jacob Young for Redcar.
Mr Clarke, who called for investment in carbon capture, utilisation and storage when he was first elected six years ago, said: “I am absolutely thrilled that Teesside is now confirmed as such an important future centre of this technology.”
Mr Young added: “This means more jobs for local people and it puts Teesside way ahead of the pack with the development of the very latest in green technologies.
"This puts us on track to becoming a world leader in the technology of tomorrow and we should be proud of what we are achieving here on Teesside."
Work is expected to start on the NZT project in a matter of weeks with the first commercial operations expected in 2027.
Ian Hunter, managing director, Net Zero Teesside Power, said: “The selection of NZT Power is a hugely positive step forward for Teesside and the UK.
“NZT Power will create and support thousands of jobs, whilst providing enough low carbon power to meet the electricity needs of around 1.3 million homes.
“NZT Power is designed to provide flexible low-carbon power, an essential back up to intermittent forms of renewable power, enabling the further deployment of wind and solar power nationally.”
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Henri Murison, chief executive of the Northern Powerhouse Partnership, welcomed the news for Teesside but said the decision to overlook the Humber mean the north would be missing out on £15billion in private investment as well as thousands of high quality jobs.
He said: “This decision raises serious concerns about whether the Government is playing political games - divide and rule - instead of doing what is right for the economy and the path to decarbonisation.
“It’s vital that the Government accelerates the expansion of the scheme to avoid any more damage.
“While we welcome the announcement on Great British Nuclear, we cannot keep dragging our heels on delivery.
“We need action now.”
The concern was echoed by Stockton North MP Alex Cunningham, who is also chairman of the All-Party Parliamentary Group on Carbon Capture, Utilisation and Storage.
He has also sounded warnings about the small number of projects, only eight out of 40 shortlisted, that are going forward.
He said: "I’m pleased to see the Carbon Capture and hydrogen projects on Teesside progress to the next stage and just hope final approvals will be in place soon.
"It is however very disappointing to see that out of the 40 longlisted projects only eight are going forward and that many in East Coast Cluster, including any in Humber, are missing out.
“It’s also disappointing to see that companies like CF Fertilisers are not on the list. CF Fertiliser is a major industry in Teesside and has encountered a number of issues in the past couple of years.
"It’s plant in the North West has closed and it’s Billingham base is working at reduced capacity.
"I would have hoped the Government would have seen the benefit in supporting this organisation and the jobs it creates.
"Similarly, the Alfonar green aviation fuel project failed to make the cut.
"I will continue to work with the sector to promote schemes throughout the country and here in Teesside and urge Ministers to expedite final decisions and demonstrate by action they are serious about Net Zero and the economic and environmental benefits it can bring.”