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North East energy sector could be ‘crucial’ to Northern Powerhouse

Energy experts at roundtable discussion outline how the region could be future to economic growth

The North East energy sector can play a key role shaping the future of the Northern Powerhouse, say the supporters of the new Northern Energy Taskforce.

On the back of its vast coal reserves, the North East became home to major centres of power and heat generation, and a wide range of energy-intensive industries then clustered around them.

But the global drive to cut carbon emissions has created an uncertain energy environment in the region, say the authors of a new report

‘Who Will Power The Powerhouse?’ by IPPR North says the region’s future role in ‘keeping the lights on and our homes warm’ is now in question.

On releasing its new report, IPPR North helped launch the Northern Energy Taskforce, tasked with developing an energy strategy for the Northern Powerhouse.

The Taskforce is chaired by Sir John Harman, who will be supported by a number of high-profile figures with expertise across infrastructure, engineering, finance, academia and local government.

Its aims are to deliver a northern energy system strategy to 2030; one which addresses the opportunities for businesses, higher education institutions and the public sector in the energy sector and include measures for ‘energy devolution’.

In order to work out how best to draw up this vision IPPR has sought the views of prominent North East energy industry professionals, and this has seen Newcastle firm Square One Law sponsor two regional roundtable events, one in Teesside and one in Newcastle. James Bryce, partner and head of the corporate and commercial team at Square One Law, said: “We became involved in the Northern Energy Taskforce for a number of reasons, but we particularly saw it as a fantastic opportunity to try and understand what was driving regional businesses, what priorities they wanted to see looking towards the future and how we can work together to make the north a powerhouse to generate energy, innovation and ideas.”

Ed Cox, director of IPPR North, says that the region has considerable opportunities beyond the traditional energy resources.

“Across the North there are a whole host of energy sources that are really exciting and important. We know about offshore wind and the nuclear industry which can help us with this transition to a low carbon system.

“But there are others. We’ve also got things like hydrogen, for example, which could be key for new heating systems. If we can get that right then that would be a new, cleaner type of fuel for heating our homes, which of course is 40% of the energy mix and very important.

“There are also opportunities around making our energy system smarter. Crucially here in the North East there are a number of opportunities, with a whole lot of work going on around Nissan and battery storage.

“These things link together through what people call energy systems integration and it’s absolutely fantastic that at Newcastle University we’ve got a new Centre for Energy Systems Integration.
“This is looking at the way in which heat and power and transportation all link together and I think they’re increasingly becoming joined up. This means there is an opportunity for the North to be a global leader when it comes to new ways of managing and using energy.”

Speaking at the event, Jon Ferris, strategy director at Tyneside firm Utilitywise, emphasised the on-going shift to this smart energy network.

He said: “We are in the middle of a transformation of the energy market with increasing distributed generation, with more generation behind the meter and technological developments and innovations happening with transportation, with electric vehicles and battery storage, and controls for intelligent buildings.”

One component of the smart energy revolution will be storing renewable power, as Dr Colin Herron, managing director of Zero Carbon Futures highlighted.

“The opportunities in this area are huge, considering that most of Europe’s lithium ion batteries are manufactured here. What is of most interest is the possibility of using second life batteries – batteries which are no longer being used in a car – as an energy store.

“Thankfully, most of the electrical skills required for this are here in the region now. What we need is to apply existing skills to this emerging technology in order to create new business opportunities. Avid, Hyperdrive and Sevcon are great examples of companies already operating in the region and looking ahead to the future.

“Newcastle University’s smart grid lab can demonstrate the potential for battery storage and my own company, Zero Carbon Futures, is currently part of an interesting European project which is trailing an energy storage system using second life batteries linked to photo-voltaics.”

Steve Pugh, managing director of County Durham-based engineering company Bignall Group believes there are two key opportunities for the North East in the energy sector.

He said: “An essential part of maximising on globalisation is the protection of Intellectual Property. Maintaining ownership of a product or service so it can be taken around the world by your business enabling you to carve out a niche is very important. This region has always been very innovative and retaining its IP will ensure this can continue.

“Undoubtedly, the other opportunity comes from our proximity to local markets. We have Europe’s fastest wind speeds on our doorstep and also our proximity to North Sea oil and gas gives the region an inherent advantage compared to competitors who compete on price from around the world.”

While the traditional offshore North Sea industry will continue to provide opportunities, the removal of its redundant structures is set to create over £30bn of opportunities.

On this emerging decommissioning pipeline, Ed Brown, director Newcastle-based engineering company, Hardy AVARR, said: “We have just set up the Jigsaw Consortium, which brings together a number of companies who are active in the North Sea and we’re talking to oil operators about providing the consortium with a single contract for which the members will deliver all stages of decommissioning.

“That includes dealing with assets still out in the sea, get the hydrocarbons out, plug the wells and bring them onshore for disposal. It’s an opportunity to create an awful lot of high quality jobs in the region for 30-plus years.”

Mr Bryce, who heads Square One’s energy team, added: “The North has massive advantages when it comes to the energy system. The research capabilities of our universities combined with the innovation and technical expertise of the region’s supply chain have already enabled a significant amount of work to developing centres of excellence for battery storage and energy storage which is absolutely crucial to the transition to a more low carbon economy.

“The more integrated the energy systems becomes in the North, the more opportunity it will bring to the region to become a global leader when it comes to new ways of managing and using energy.”

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