The renewable energy sector could one day be worth more than £2bn to the North-East economy. Business Editor Julia Breen speaks to Dermot Roddy, of Renew Tees Valley, the company set up to attract environmental and biofules investors to the region.

THE Tees Valley could hardly boast about its environmental record in the past century. Thirty years ago, all the freshwater fish had fled the River Tees, and there were not the environmental constraints on the chemical industry that exist today.

But the region has changed in the past ten years, salmon have returned to the Tees and the North-East is looking to a new industry - renewable energy and biofuels.

Dermot Roddy, who has worked in the chemical industry for 17 years, is the man with the task of helping to bring billions of pounds into the regional economy as the sector grows.

The former ICI employee developed innovative recycling measures during his time in the company's plastics business, and ran the Petroplus crude oil refinery at Seal Sands, as site director for the £1bn-turnover facility.

As chief executive officer for Renew Tees Valley ( RTV), he is wooing companies from all over the world - convincing them that the area has the skills and the supply chain in place to be at the heart of a new industry.

RTV will promote the area as a centre for renewable energy and waste management technologies, helping create businesses and help existing ones move into new markets in renewable energy.

It is funded by regional development agency One NorthEast, and will provide the link in the chain from technological innovation to the marketplace.

Predicted growth rates of the industry are ten per cent a year - but they are already outstripping forecasts.

Since Renew Tees Valley has been operating, the Biofuels Corporation has been set up on Teesside, raising £25m from a share flotation to build Europe's largest biodiesel plant, which is at Seal Sands.

In March, SembCorp Utilities, which owns and manages the Wilton International chemical site, announced the construction of a wood-burning biomass electricity plant, which will supply the National Grid.

Fast-growing willow coppice trees will supply the wood-burner, which only give off natural carbon dioxide emissions.

Both projects have created hundreds of jobs between them - both directly and in the supply chain. The region has started turning heads around the world, with another four biofuels companies expressing an interest in investing here.

Mr Roddy said: "It is difficult to get funding for renewable technology because, often, it hasn't been tried before, and the banks are reluctant to finance it.

"But once one company starts experimenting, and it is a success, it starts a snowball effect whereby it makes it easier for other companies to finance the same technology.

"We are very, very well-placed in Teesside to attract companies, and the more we attract, the more will come."

One of the biggest potential growth markets for the area is in wind turbine manufacturing.

Middlesbrough's Marine Projects International (MPI) owns and operates the world's first specialist offshore wind turbine ship, the Resolution.

"Resolution is the only one of its kind in the world," said Mr Roddy. "It can go offshore on its own, rather than having to send out a fleet of ships, and has its own cranes on board. Once it is in the right place, it creates a steel platform to erect the wind turbines and put them into the sea bed.

"There are numerous companies here that have the skills to move into offshore wind turbines. Onshore turbines have been going for some time, and European countries such as Germany are ahead of the game there.

"But there is no one that can say they have the offshore market cornered. We aim to corner it.

"Not only is the North-East a net exporter of electricity, with big power engineering companies, we also have precision manufacturing and metal compon- ents firms - essential for the construction of wind turbines.

"All of the requirements for offshore turbines can be supplied from the Tees Valley. Companies in the North-East have been manufacturing things for offshore use ever since North Sea oil was found.

"With estimates that 20 per cent of the UK's electricity will come from offshore wind alone, that stands us in very good stead for the future.

"That figure, of course, is not including our potential for onshore wind, biomass and solar panels.

"And planning permission is becoming increasingly difficult to secure for land-based wind turbines, so the likelihood is that offshore wind farms will become more and more common.

"It is a much easier market to crack, and it is growing very fast."

Mr Roddy said Teesport was a major attraction for inward investors - and could help boost the wind turbine industry here.

"We need a thriving port," he said. "Once a wind turbine blade is more than 40m long, it is very difficult to transport it by road. People are now creating 70 to 80 metre-long blades, so they need to be moved around by ship - and as we have the UK's second biggest port that has to help."

A Greenpeace report recently estimated that the UK would have 50,000 jobs in the offshore wind industry alone - with the North-East of England looking to grab half of those jobs, when the report considered the skills and physical assets here.

"It won't take over the chemical industry in the next ten years," said Mr Roddy, "But the chemical industry is always going to struggle against low costs, so if we can put something else into the economy that draws on the same skills, it would soften the blow if the chemical industry did start to decline."

In only five years, the jobs total in renewables for the region looks likely to be 10,000. With 25,000 jobs in offshore wind turbines in the pipeline, and the possibility of even more from biomass and fuels, the North-East looks in line for a massive economic boost in the coming years.

The iconic Middlehaven development - now under way close to Middlesbrough FC's Riverside Stadium - could also be powered by environmentally-friendly technology, Mr Roddy hopes.

As a cluster of offices, leisure facilities and homes, he believes it is ideal to be powered by a mini-power station which provides combined heat and power - something common overseas but rare in the UK.

Instead of having huge power stations that waste most of the power they generate before it is pumped out to homes and businesses, he believes the future is to have smaller power stations that provide both heat and electricity, similar to the way steam and power is provided for chemical companies at Wilton.

The Wilton power station is 78 per cent efficient because it provides both heat and electricity.

At present, only 22 per cent of power generated in large, coal-fired stations reaches homes, with 65 per cent lost in heat that is pumped out of cooling towers.

Mr Roddy said: "People are starting to say that big power stations won't be acceptable. We need to built power stations on a smaller scale, where we need them, not hidden away in the countryside.

"If we create this power station at Middlehaven - which won't be an eyesore like the Drax power station - it will provide the air conditioning, hot water for heating and electricity.

"We guarantee it will be cheaper and more reliable than conventional technology, and will provide enough energy for houses, shops and Middlesbrough College.

"We're planning that it will be powered by natural gas - we can get funding for that from the banks. They won't use anything they're not sure they can get a return on."

Mr Roddy, although paid to be the optimist, believes the sector will be immensely profitable if the North-East can grab the lion's share .

He said: "I would hope that this whole sector - renewable energy and recycling - will one day contribute £2bn to the North-East economy.

"And the Tees Valley, as the most industrialised part of the region, should gross more than its fair quota of that."

Published: 07/06/2005