New energy fuels the powerhouse
Andy Koss is fully energised when it comes to the opportunities for a Northern Powerhouse fuelled by the region’s energy sector.
Speaking to TheBusinessDesk.com, the chief executive of Drax power station said: “The North is well placed to be the driving force behind new technologies that will power the UK for years to come – and power our economy too.
“We’ve already come a long way but there remain some huge opportunities for the North to establish itself as the nation’s hub for both low carbon and flexible energy generation.”
He points to National Grid estimates showing that the value of flexible support services to the grid will double from £1bn to £2bn between now and 2020, with projections this will continue to rise into the 2030s.
Koss said: “The North has historically been the powerhouse for the rest of the country, thanks to decades of building power stations in the region.
“We have the skills, the natural resources and the supply chains in this region to the extent that we are self-sufficient in energy in the North and actually export to the rest of the UK.
“Historically this was based on a fossil fuel energy system but that is changing. In recent years, the drive to decarbonise the power system has led to an exponential growth in renewable technologies such as biomass, onshore and offshore wind and solar in the region.
“Alongside this we have seen the development of significant supply chains, creating jobs and growth.”
Drax contributes more than £500m a year to the Northern economy and supports 6,000 jobs, Koss added, stressing: “Our business, and the energy industry as a whole, plays a vital role in the region’s economy.”
On a site near Selby, Drax was once the UK’s biggest coal-fired power station. It has now transformed itself as the largest decarbonisation project in Europe.
Two thirds of the station has been converted from coal to biomass and Koss added: “We’ve also got plans to repower the remaining two coal generating units at Drax to gas, which if approved will enable us to deliver more flexible, reliable power and extend the life of the power station.”
“At Drax we recognised a long time ago that coal had no long-term future – so we needed to come up with a plan to transform the plant, reduce our emissions and, in the process, protect jobs,” said Koss.
“We’re very proud to be well on our way to being off coal ahead of the government’s 2025 deadline – with just two coal generating units remaining which we plan to replace with gas.”
Koss added: “Our plans are progressing well. We have converted a fourth generating unit from coal to biomass which means we have more biomass capacity to generate more renewable power at the times the grid needs it the most.
“During the summer we also announced we’d signed a new £40m contract with Siemens to upgrade the turbines on our first three biomass units – this is further investment in the power station and the Northern economy, with work to get underway in 2019.
“We are also campaigning with others for a new rail link between Skipton and Colne. This would transform east-west connectivity in the North, substantially reducing congestion on the region’s roads. It would cut the time it takes to get freight trains from Liverpool to our power station at Selby from nine hours to three.”
Koss also highlighted some of the pioneering work taking place elsewhere in the region – including the Leeds H21 City Gate project looking at the potential to decarbonise significant parts of the existing gas network by replacing natural gas with low carbon hydrogen.
And he described the opportunity to create a low carbon transport economy powered by electric vehicles as “significant”.
He added: “Others in the region have seen the opportunities created by the move to a lower carbon future – the government wants to see clean growth, and the North is ideally placed to deliver it. Once home to the Industrial Revolution – we’re now witnessing an electric revolution.”
Skills are vital
Innovation is at the heart of the North’s vision of clean growth but there are challenges – not least the need for a highly skilled workforce, both now and in the future.
Koss said: “We already have world-class engineers but we need to do more to invest in the next generation so they have the right education and skills, particularly in Science, Technology, Engineering and Maths (STEM).
“At Drax, we see 13,000 visitors a year to the power station, many of them students – from primary school age up to post graduates.
“We welcome visitors to the site because we strongly believe that if we bring energy and engineering to life we can inspire the next generation and unlock the potential we have across the Powerhouse region.”
The business also works closely with the region’s universities, including sponsoring some PHDs at Sheffield.
Koss explained: “They’re looking at some really exciting, cutting edge research including how human behaviour will impact on vehicle to grid technologies for electric vehicles – vital for our power grid of the future.”
Drax is also partnering with C-Capture, a Leeds University spin-out – investing £400,000 on a bioenergy carbon capture and storage pilot using the innovative technology it has developed.
Koss said: “It’s ground-breaking stuff which could help the UK meet its carbon targets. And the North is ideally placed to locate carbon capture and storage clusters in the Humber region or around Teesside.
“Building the required infrastructure in areas of high carbon emissions was recognised by the recent CCUS Taskforce report as the most cost effective way to bring on this essential technology at scale.”
The company has also increased the number of apprentices at the power station this year by 50 per cent as part of a commitment to skills development. Koss describes them as “our future”, but added: “We need to do more – particularly to encourage more girls to consider STEM careers.”
Certainty is the key
The “key catalyst” to maximising the opportunities in the energy sector in the North is long-term regulatory certainty from government, said Koss.
He believes that government support for renewable power, combined with a strong carbon price, has incentivised the development of technologies like wind, solar and biomass and the removal of coal generation.
Koss said: “These interventions have been fundamental to the success we have seen so far in the UK’s decarbonisation, with the energy sector at the forefront of that progress. We need to see these policies extended.
“However, this is being jeopardised by changes in the market – sky high gas prices have recently made coal-fired power more economical than gas – highlighting how important it is for the government to maintain a strong carbon price in the autumn Budget.”
The UK is getting closer to removing coal from the power system by 2025, but Koss added: “We’re not there yet”.
“Emissions from power generation would rise significantly without a strong carbon price, making it very difficult to deliver the clean growth required to meet our climate targets.”