The Port of Tyne reports that coal imports are at record levels currently with almost four million tonnes arriving last year to power Britain’s electricity network. These levels are expected to fall though as coal fired power stations close by 2020. This is being countered by wood pellet imports that are also at a record high, making the Port the number one port in Europe for handling wood pellets. Port of Tyne handles one million tonnes of wood pellets each year, mostly from North America, which is transported mostly to Drax power station in Yorkshire. Further expansion is expected at the Port as Drax converts to 50% biomass.
The use of biomass for electricity production should provide a reduction of over 70% in CO2emissions compared to fossil fuel fired generation from April 2015. In future, biomass power generators will have to demonstrate their fuel is sustainable under new government criteria, drawn up to address issues such as sustainable harvesting rates, biodiversity protection and the use rights for indigenous populations. Organisations that do not demonstrate compliance with the criteria may see their financial support withheld. All generators of 1MW or greater capacity (around 98% of biomass generation capacity in the UK) using solid biomass or biogas feedstock will have to show they are meeting the criteria to claim support under the Renewables Obligation.
Earlier this year the Port unveiled £180m plans for new wood pellet handling developments at Tyne Dock. The Energy Team at Muckle LLP has been advising the Port to help secure finance for this development by entering into a joint venture with UK fund manager, Equitix, whilst also being involved in lining up a contractor for the construction work.
The Port has talked to major manufacturers in the offshore wind sector and has land available for development. The delays in the offshore wind projects for the Round 3 site at Dogger Bank means that Port of Tyne is also focusing on offshore oil and gas in the meanwhile. Our Energy Team helped the Port acquired McNulty’s shipyard next to Tyne Dock to help it expand for the offshore sector.
For more information, help or advice please contact Andrew Davison on 0191 211 7950.