Port of Tyne to Invest £180m to Support Renewable Energy

Fri, 25 January 2013

The Port of Tyne is to invest £180m to develop infrastructure and new facilities to handle the import of wood pellets from North America for Drax power station, which is converting to biomass.

It plans to extend its main Riverside Quay at Tyne Dock, bringing jobs and economic benefit to the North East region.

Drax, based in Selby, North Yorkshire, is the main importer of biomass to the UK and last October raised £190m to convert three of its six generating units exclusively to burning biomass instead of coal, at a cost of up to £700m.

Drax power station used to be the largest emitter of greenhouse gas emissions in the UK from its massive appetite for coal.

Biomass-burning plants in the UK import most of their timber fuel, mostly from North America, which increases their carbon impact from transportation. This activity is driven by European policy on biofuels and renewable energy.

North American export volumes are forecast to increase from an estimated 1.5m tons in 2012 to 5.7m tons in 2015, according to the North American Wood Fiber Review.

Total Canadian exports of wood pellets to Europe is rising, with reports of British Colombian pellet plants running at full capacity thanks to European demand.

The Port of Tyne, once renowned for its coal exports, has focused its business strategy on growth in renewable energy, particularly biomass and, longer-term, offshore wind.

"It is in renewable energy where we see the next major area of growth for us," said Andrew Moffat, the Port of Tyne's chief executive officer. He said recent government announcements on support for renewable technologies had helped to build confidence. "That is why we are working with major companies in the power generation industry to identify their future requirements and making sure we will be ready to meet their needs."

The port can already handle 1.4m tonnes of wood pellets, but is in the process of finding a partner to help state it expand and find the cash it needs, which will represent its biggest-ever investment.

The planned developments, if delivered in full, will create 900 jobs in construction and a further 300 full-time operational jobs, supporting an additional 2,000 jobs.

This would take the port's impact on the regional economy to well over £500m in Gross Value Added each year, and increase the number of jobs supported by 20% to a total of 12,000 jobs.

In addition, there are other plans for the Port's estate on the north bank of the River Tyne, in particular for additional investment on a large site within the North East LEP Enterprise Zone, which is currently being marketed for offshore wind turbine manufacturing for the world's largest offshore wind farms in the North Sea. Again, it says it is in advanced discussions with potential partners.

Initially, the Port will submit applications to extend the Port's multi-functional berths at Riverside Quay by 100 metres and provide the additional facilities for wood pellet including multi-purpose sealed storage, enclosed conveyor systems and a new length of railway line.

The proposed developments have been welcomed by David Miliband, the town’s Labour MP.

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