World first for Tees Valley as multi-billion pound clean energy plant announced

A consortium of six global energy giants is today unveiling the first phase of plans to create a huge clean gas power plant which will capture its carbon emissions and store them in pipelines under the North Sea.

The Tees Valley has been selected from 50 potential sites, and it is hoped that the huge project will stimulate more innovative clean energy industries in the region.

The area's directly elected mayor, Ben Houchen, said: “This multi-billion pound energy project will pave the way for our region to become the clean energy powerhouse of the UK, creating and safeguarding thousands of jobs.

“We have got some of the biggest companies in the world choosing Teesside to develop this ground-breaking technology – a world first which will also support the development of our huge processing and chemicals industry.”

It is understood that the development will go on land formerly associated with the steel-making industry. The 4,700 acres of land in the Redcar and Cleveland borough are now overseen by the South Tees Development Corporation, which is chaired by the mayor.

Called the "Clean Gas Project", it will be the world’s first gas-powered energy plant to fully deploy Carbon Capture Utilisation and Storage (CCUS). It is being promoted by the OGCI Climate Investments consortium which comprises six global oil giants: BP, ENI, Equinor, Oxy, Shell and Total.

Mr Houchen said: “It is a project of national significance, and once developed will create thousands of jobs and even more in our local supply chain.

“Due to the sheer size and scale of this multi-billion pound energy plant, it won’t happen overnight. But to be selected out of 50 business models by this major international consortium is a clear vote of confidence in our local economy and our skilled workforce. Let there be no doubt: we’re ready to deliver this monumental project.”

Pratima Rangarajan, chief executive of the consortium, said: “Carbon capture utilisation and storage is critical to meeting the climate goals of the Paris Agreement and Climate Investments is proud to move this project forward within the structure of the Tees Valley Cluster.

“The Clean Gas Project is an example of how industry can work together to bring forward proposals that support the government’s ambitions for CCUS; we recognize the work and commitment by the UK Government, the Tees Valley Mayor, TVCA and the South Tees Development Corporation to deliver the practical action needed to move CCUS forward.”

The existence of the project has been hinted at for some months by Mr Houchen, but it has taken a massive, and public, step forward with today's announcement.

It is hoped that its infrastructure would enable wider industry on Teesside and elsewhere to capture and store the CO2 that it produces. Companies interested in converting emissions into more useful chemicals are also looking at how they can fit in with the project.

Speaking on a previous visit to region, Minister of State for Energy and Clean Growth, Claire Perry MP said: “This is a multi-trillion pound opportunity, so the chance for businesses here to think about innovating in new technologies that we can then export to the world means that Teesside can be a powerhouse.”

Only yesterday, Ms Perry was questioned by Redcar MP Anna Turley about the Government's position on CCUS. She cited a report by the think tank Policy North which was released in September saying Teesside should be the pilot area for UK’s development for CCUS. It called on the Government to bring forward its plans or risk irreversible damage to UK industry.

Ms Turley said after the Commons committee meeting yesterday: “CCUS is an issue very close to my heart obviously for Teesside, but is not just an important issue for my area. The Committee on Climate Change have said that failure to deploy CCUS would double the cost of meeting the UK’s climate change targets. It is clear there is an urgency and imperative here on the policy."

Ms Turley added: “This is an exciting investment for Teesside and exactly the kind of modern, green industry we have huge potential to take a lead on.

"The fact the consortium has chosen Teesside for a world-leading innovative project is a huge vote of confidence in the skills and infrastructure of our area, and I pay tribute to all members of the combined authority and the development corporation who have worked hard to promote our area’s case.

“This is obviously the very early stages of a big project, and the land ownership issues obviously still need to be resolved before this project can progress fully. The onus is now on politicians and officials, locally and in government, to provide the support and confidence needed to bring this to fruition.

“CCUS in particular is a technology with huge potential for Teesside, especially with the infrastructure for storing under the North Sea, but one which has not yet been developed at scale around the world. When I questioned the clean energy minister on this last week, she was reluctant to make any commitments on how government will support development but the private sector are looking to government to make the costs viable."

Simon Clarke MP said: “The breaking news about the multi-billion pound clean gas energy plant coming to our area is absolutely amazing, and will give lift off to the local economy.

"This project will unlock thousands of jobs and will become a new anchor employer for Teesside in the decades ahead.

"It is a huge tribute to the work of the Tees Valley Mayor, Ben Houchen, and his team that this has been secured for our area: the competition was fierce and this represents a tremendous victory.

"Carbon capture, utilisation and storage is a technology that’s central to our chances of preventing catastrophic climate change, and something I have been campaigning for hard in Westminster.

"This will be the first energy plant in our country where carbon emissions are either put to commercial use or stored safely under the North Sea.

"The world is watching Teesside, and we can all be proud and excited today.”

And Alex Cunningham, Labour MP for Stockton North and Chair of the All Party Parliamentary Group on Carbon Capture and Storage added: “This is tremendously good news for the Tees Valley and the kind of project we’ve been campaigning for in Parliament.  It’s testament to the hard work of the Teesside Collective and the Tees local Councils who have been working towards this goal for several years.

“At long last the Government, which axed a billion pound grant for the White Rose and Peterhead projects several years ago, have accepted the arguments that it needed to get behind Teesside and make CCUS happen.

“Today’s decision could be transformational for our area – and provide industry, ground down by high carbon taxes, with a way of cutting their costs and making their businesses more cost effective.  This must then lead to more investment – not just from existing companies but new ones who can benefit from carbon capture and bring the jobs bonanza we need.

“We know it is early days yet and there are many details to be sorted out – including what specific support the Government is actually giving – but I look forward to more news soon.

“I, alongside my Tees colleagues, will continue to hold the Government to account to ensure they deliver on the promises made to our people and don’t walk away from the Tees project as they walked away from the others.”

The importance of the project was underlined yesterday when the United Nations announced the first rise in global CO2 emissions in four years. The UN says that national efforts to cut carbon are faltering.

To meet the terms of the Paris climate pact, it is necessary for global emissions to peak by 2020, but the new figures suggest that is now not likely even by 2030.