Energising the powerhouse

The powerful role the energy sector can play in the future of the Northern Powerhouse was underlined in the route map to productivity unveiled 12 months ago.

The Northern Powerhouse Partnership (NPP) placed energy at the heart of its landmark 2050 report.

Its call for government investment included £2bn to replace the entire gas network of Leeds with hydrogen, produced in the Tees Valley, which would significantly contribute to the UK’s 2050 and Paris Agreement commitments on reducing carbon emissions.

Added to that was £1bn to create a new Northern industry in small nuclear reactors, capable of being manufactured at a plant and brought to a site to be built and allowing for better nuclear material security.

Andy Koss, chief executive of Yorkshire’s Drax Power, who led the energy engagement side of the report, declared at the launch of the report: “The North is uniquely placed to deliver the UK’s energy needs.

“There are huge opportunities for us as a region – not just in terms of potential jobs and the economic benefits, but also the positive environmental impacts associated with decarbonisation.

“In the North we lead the way in existing energy technologies such as bioenergy, offshore wind and nuclear power – all vital in delivering the government’s Industrial Strategy.”

The prize in the region’s grasp was also highlighted by the think-tank IPPR in the publication of its “Northern Energy Strategy” last October.

It brought together a ‘Northern Energy Taskforce” and created its vision for the region to be the “leading low-carbon energy region in the UK” by 2050.

It sees an “energy economy” worth £15bn a year, delivering 100,000 jobs “providing affordable, clean energy for people and businesses across the North”.

Its report declared: “Unleashing the northern energy economy is essential to achieving the nation’s climate change commitments and has the potential to deliver affordable energy for businesses and households alike.”

Those reports look to the future. Ian Wood, partner at Squire Patton Boggs specialising in energy projects, says that the sector is extremely important to the region today and that innovation will continue to drive it forward.

He says: “There’s also a broad and diverse spectrum, with lots of innovation in terms of renewables and hydrogen. Work is also going on in the fields of fuel cells and battery technology.”

He sees the resumption of shale gas extraction in the North as “an exciting opportunity” and also points to the growth of offshore wind technology.

That includes the Siemens Gamesa Renewable Energy (SGRE) factory in Greenport, Hull, with its world-class offshore wind manufacturing, assembly and port facilities.

Wood adds: “There is a very healthy appetite for investment in the energy sector at the moment.

“It is an incredibly vibrant place and people recognise that a strong regulatory environment also helps. The UK has a good reputation of stability from a regulatory perspective.”

Phil Abram, partner at KPMG, has wide experience of the energy sector. He says that it is a “key sector” for the North and is embedded in the history of the region.

Yorkshire coalfields and power stations helped drive the first industrial revolution, now emerging technologies are set to fuel the new changes to the economy. Abram says: “There is a continued focus towards clean growth.”

Once seen as a traditional, slow-moving industry, Abram says that today things are “fast moving”.  He highlights the research work being carried out in the region’s universities and the R&D capabilities of businesses.

However, there are challenges, not least in ensuring that Yorkshire and the wider North have the skillsets to fully benefit from the changing energy landscape.

Abram says: “Skills are fundamental. Developing these skills will also help us build and address productivity form the point of view of the region.”

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