Plans for a £300m biomass power station in Northumberland have been shelved.
Renewable energy company RES made the shock announcement yesterday, just seven months after plans for the Blyth plant were given the green light by the Government.
The North Blyth Biomass Power Station, the first biomass development by RES, was due to bring 300 construction jobs and 50 full-time operational jobs to the region.
It had been expected to generate hundreds of millions of pounds of investment into the Blyth estuary and wider Northumberland economy.
But work has ceased on the site at the Port of Blyth after the withdrawal of a key project partner late last year which RES said was due to ongoing uncertainty in UK energy policy.
RES’s Chief Operating Officer for the UK Gordon MacDougall said: “Despite the support the project enjoys locally due to the significant benefits it would bring to the local and regional economy, the North Blyth Biomass Power Station currently faces insurmountable investment barriers due to uncertain Government energy policy.
“It’s bitterly disappointing for RES that we are unable to bring this exciting project forward, and deliver the significant boost it would have represented for the Blyth and Northumberland economy. However, the gradual erosion of support for dedicated biomass leaves us with no other option.”
RES blamed what they termed the Government’s “inconsistent” support for dedicated biomass energy over the last two years as well as increased uncertainty over the UK’s energy policy under the Government’s Electricity Market Reform process. RES bosses stated it has critically undermined the investment case for the North Blyth Biomass Power Station.
Mr MacDougall added: “RES is grateful for the support we have received from stakeholders including the local community, Northumberland County Council, Environment Agency and project partners such as the Port of Blyth. However as the UK’s energy policy currently stands, we cannot make an investment case to take this project forward.
“This is a reminder to Government that, without a consistent approach to energy policy, investors and developers will be deterred from delivering the billions of pounds needed to ensure the nation’s energy infrastructure is able to keep the lights on and secure cost effective electricity for British homes and businesses.”
However, a spokesperson for the Department of Energy and Climate Change said the decision was a commercial one.
A DECC spokesperson said: “We are disappointed that RES have decided not to take this project forward, however this is a commercial decision. The UK is one of the world’s most attractive places to invest in renewable energy, ranking second in the world for biomass.
“Our electricity market reforms will deliver at least £40bn of investment in renewables between now and 2020, providing enough power for 10 million homes.”
As well as the loss of job opportunities and investment, the end of the project also means the loss of the annual Community Benefit Fund.
The news of the end of the project was seen as a blow by politicians across the county.
Coun Grant Davey, leader of Northumberland County Council, said: “This is very disappointing news for the county.
“A lot of time and effort which we have put into this project has now been lost but we will continue to support the Port of Blyth in a bid to bring in more investment.
“The power station project would have brought a large number of construction and operational jobs to south east Northumberland which in turn could well have attracted more businesses to invest in the county and even the wider region.
“Despite the announcement we remain committed to attracting new and innovative businesses to Northumberland and the news this week that a lighting company is relocating to Cramlington and creating 35 new jobs has to be welcomed.”
He added: “It’s not the time to play politics with this issue but this decision is a damning indictment on the lack of a coherent energy policy by the coalition government.
“It’s also a potential blow to the wider Northumberland economy and I’ll be making representations to the government seeking answers. I’m also seeking a meeting with RES to see if there’s anything the county council can do and I’ll also be meeting with Blyth’s MP Ronnie Campbell in order to make maximum use of our offices to put pressure on the government to listen to RES.”
Ian Lavery, Labour MP for Wansbeck, said the blame for the situation lay with the Government.
“I think the blame for this must be focused on the Government because of its incoherent energy policy,” he said.
“There’s a lack of confidence from investors who want to invest in different renewable energy and biomass is renewable.
“Unfortunately investors lined up with RES decided not to invest at the power station in Blyth.
“There will be a mixed reaction because although the community were opposed to a new power station they came around and they pulled together on this issue.”
He added: “We will just have to take it on the chin and hope there’s other employment coming into the area to create the employment that’s much needed in the area.”
Bittersweet moment for opponents
The power station project had proved controversial with residents in the North Blyth and Cambois area.
It was opposed by a number of residents, who claimed the plant would be too big and too close to their homes. Fears were also voiced that it would have caused air pollution and traffic problems.
The scheme was also opposed by the North Tyneside branch of Friends of the Earth, who questioned its green credentials.
But last night Paul Crossland, who lives in North Blyth with wife Carol and led the protest campaign against the power station, said the decision to stop work was “bittersweet”.
“We are pleased it is not going ahead but disappointed over the loss of community funding that would have been coming our way and sadly will not,” said 61-year-old Paul.
“We were fighting a losing battle and we knew that but we were looking forward to looking at what they community funding would be spent on. It was to be about £100,000 a year for the life of the plant so it was a lot for the community.
“They have probably spent a considerable amount of time and money over the last five years.
“But it is not cut and dried that it’s not going to happen, unless investors knock on the door,” said Mr Crossland, who received a call from RES yesterday morning to update him on the latest news.
But he said the news had not come as a shock to him.
“We did consider this a month or two ago, reading between the lines we thought they were having trouble getting the money,” he said.