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The EnergySectorPowering the region’seconomic future

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WHEN you hearpeople around theHumber talkingseriously aboutrenewablesoffering the areathe opportunity toexperience aneconomictransformation, inthe same way thatoil has fuelleddecades ofprosperity for

Aberdeen, it is difficult not to be excitedby the prospects for business in thisregion offered by the energy revolutionon the horizon.In fact it is clear the region as a whole is not just setto benefit from moves to generate energy in ever moreinnovative ways, it is leading the way in demonstratinghow it can be done.

With the Government on the verge of setting out itsvision for the future of the energy market, this is theperfect time to reflect on the major issues facing thesector in Yorkshire.This is a complex and detailed area and I am pleasedwe have had the input of experts from law firmAddleshaw Goddard, our partner on this supplement.Over the following pages you will find analysis of themajor issues affecting the energy agenda, includingassessing the region’s future energy needs, the schemesin Yorkshire helping to drive the economy, and adiscussion of the potential obstacles that lie in the pathof major changes in the energy sector.The energy sector is often identified as a source ofmajor growth for the Yorkshire and Humber economy– this supplement shows how that is already startingto take shape.

Ian BriggsEditor

Ian Briggs - EditorTheBusinessDesk.com

Foreword:The energysector

TheBusinessDesk.comRound Foundry Media Centre,Foundry Street,Leeds LS11 5QP

managing director:David Parkin e: [email protected]

editor:Ian Briggs e: [email protected]

deputy editor:James Reed e: [email protected]

business development manager:Aimee Willow e: [email protected]

t: 0113 394 4541f: 0113 394 4322

‘This is the perfect time to reflecton the major issues facing thesector in Yorkshire’

ContentsForeword:The energy sector ...................................P2

Foreword:Richard Goodfellow, head of energyand partner, Addleshaw Goddard ...........P3

Future energy needs............................P4-6

Leading the green energyrevolution ...........................................P8-10

Delivering a new energy future ........P11-13

Round Table:Powering the region.........................P14-16

P2 TheBusinessDesk.com - The Energy Sector supplement - July 2011


HERE inYorkshire, we'reon the cusp ofsomethingreally exciting.Britain's energysector needsinvestment – tothe tune of£200bn accordingto the Departmentof Energy &Climate Change

(DECC) and it needs it fast.This must bring opportunity to Yorkshire whichalready has a host of advantages that will see the regionre-emerge over the next few years as a major hub ofenergy innovation and expertise.

The Yorkshire and Humberside region is already animportant producer of electricity for GB and generatestwice as much energy as the nearest large region. Thisof course is largely due to our coal industry which stillhas an important part to play in GB's energy mix withthe innovation of clean coal technology.

We are also ideally placed, thanks to our geography,to jump on the government's promise of significantinvestment for the renewable market over the nextfew years. Immingham and the Humber has alreadybecome a hub for renewables and there is everyindication that the region will continue to attractinvestment for all types of projects including, offshorewind, biomass and bioethanol.

Our strong agricultural heritage and major cities giveus the perfect opportunity to take the lead onenergy-from-waste projects which range from largeprivate finance initiatives (PFIs) to small anaerobicdigestion schemes. Our food production andmanufacturing bases will also provide perfect test bedsfor smaller scale renewables and innovative dual

production technologies such as anaerobic digestion.We are also ideally placed to drive the nuclear expansionprogramme with companies like Sheffield Forgemasterand Rolls Royce bringing further investment andexpertise to the region.

We are also very lucky in Yorkshire to have such astrong academic hub and public sector to tap into.Our universities and experts in this area are worldclass and helps set the region apart when it comes toskills, knowledge and innovation. You only have to lookat the work that Sheffield University is doing withSiemens, at individuals like Tom Riordan ororganisations like CO2Sense to know that the regionhas a significant role to play in the shaping and deliveryof energy policy in the future.

However despite these opportunities, I am notcomplacent. Our region has a long way to go before itproperly exploits these natural advantages. Where arethe entrepreneurs? Where is the information to allowus to exploit these opportunities? Who is stepping up?

As a partner at Addleshaw Goddard based out of Leeds,I am excited by these challenges and am confident thatwe can provide the advice and the springboard neededby the market to take advantage of this period ofinvestment and growth. I hope you enjoy reading thereport and will share our passion and enthusiasm forthe reawakening of Yorkshire's energy sector.

Richard Goodfellow - Head of Energy and Partner,Addleshaw Goddard

Richard GoodfellowHead of Energy and Partner,

Addleshaw Goddard

‘I am excited by these challengesand am confident that we canprovide the advice needed to takeadvantage of this growth’



Energy excitement building in region

YORKSHIRE’s futureenergy needs, like much ofthe UK, are changing, butthe drivers behind theincreasing energyrequirements offeropportunities for business.

Infrastructure needs, disappearingpower stations, demands fromindustry, and changing workingand living habits are just some ofthe factors influencing our futureenergy needs.

Add to this the calls forincreasing use of renewable energy- covering everything from windturbines to carbon capture andstorage and ‘clean coal’ powerstations - and the UK’s energylandscape is set to be transformedin the next few years.

Yorkshire is in a good place tocapitalise on the opportunitiesthe evolution of the energy sectoroffers, according to experts- and organisations are alreadytaking advantage.

Richard Goodfellow, partner andhead of energy at law firmAddleshaw Goddard, says futureenergy security is a “key issue”for business.

With long term energy costs rising,

the regulatory burden on businessincreasing and consumersdemanding green products,investment decisions have to betaken in an uncertain market.

“What’s driving increasing energyrequirements is a collection offactors,” Goodfellow says. “The firstis policy drivers that go back toKyoto and earlier of, in effect, tryingto find ways to make the cost ofcarbon more transparent.

“This policy driver, allied to a globalincrease in demand for fossil fuelsbecause of the rise of the BRIC(Brazil, Russia, India and China)economies, has led to increasedenergy costs.

“We are also, as a nation, stillvery wasteful in our use of energyin comparison to much ofScandinavia for example. Thesefactors together drive the need tomake energy security a key issuefor consideration.”

Goodfellow adds that from hisexperience, many businesses areseeing opportunities in the UK’schanging energy needs and areexploring ways to be involved in theenergy supply chain to achieveresults including cost reductions,exploiting commercial opportunities,improving their green credentialsand complying with existing andforthcoming regulation.

Joanne Pollard, chief executiveof CO2Sense, the not-for-profitorganisation that provides fundingto help companies develop arange of low carbon initiatives,said many companies in Yorkshirewere starting to see theadvantages of tapping into thechanging energy picture.

Renewable energy: an increasing use

Future energy needsRegion in strong position to capitalise on supply and demand agenda - by Ian Briggs

‘Businesses areseeing opportunitiesin the UK's changingenergy needs’

‘Energy needs arebeing driven by thetwin factors of supplyand demand’



“We are finding that there is a bigincrease in the number oforganisations - including SMEs,large businesses and localauthorities - who are looking todevelop renewable energy projectson their premises, largely thanks tothe income that they can enjoy,”Pollard said.

“With the government incentivesavailable, payback periods can beless than two years for somebiomass installations.”

Pollard warns, however, thatorganisations thinking of investingin renewable projects should gethelp to make sure they are makingthe right decisions.

“With all the different technologiesthat are available, getting the righthelp and advice is crucial to avoidinstalling a facility that is simply notright for the location and whichnever returns a profit,” she adds.

It is widely held that the region’senergy needs are being drivenby the twin factors of supply anddemand.

On the supply side, manycommentators see the impendingclosure of many of the UK’spower stations as having amajor impact.

It has been estimated that out ofa total of around 75GW of powergeneration, 20GW will disappearby 2015 as power stations close,with one academic evenpredicting the nation couldexperience blackouts between2013 and 2016.

The Government is to press aheadwith the biggest nuclear programmefor a generation and recentlyannounced eight sites where newreactors are planned, with Sellafieldin Cumbria being one of thepreferred locations.

Ministers say the new reactors willmaintain electricity supplies and cutgreenhouse gas emissions as theold ones are shut down.

Alongside nuclear, CO2Sensesays an ongoing “massiveinvestment” in renewables will“change the energy mix”.

“Thanks to government incentivessuch as the feed-in tariff (FIT) andthe renewable heat incentive, weare seeing some big investmentsin wind power (both offshore andonshore) and other forms ofrenewable energy such as hydro,biomass and anaerobic digestion,”says Pollard.

CO2Sense has investedhundreds of thousands of poundsin renewable energy projectsincluding community-ownedschemes across Yorkshire,including a 2.1MW anaerobicdigestion power plant in Driffield.

Additionally on the supply side,government intervention is alsoseen as a major factor withinitiatives such as FIT being away for the coalition to achieve itslegally-binding target to achieve15% of energy from renewablesources by 2020.

On the demand side, CO2Sensesays microgeneration - thesmall-scale generation of heatand power by individuals, smallbusinesses and communities tomeet their own needs, asalternatives or supplements totraditional centralisedgrid-connected power - is increasingthanks to government incentives.

Local authorities can now benefitfrom this by selling energy theygenerate from renewable sourcesback to the National Grid and,according to Tom Riordan, chiefexecutive of Leeds City Council,the Government’s austerityThe 2.1MW anaerobic digestion plant in Driffield

‘Ministers say nuclearreactors will maintainelectricity suppliesand cut greenhousegas emissions’

‘Local authoritiescan benefit fromselling energy theygenerate back to theNational Grid’



measures have changed theemphasis on the public sector’sapproach to energy.

“In the public sector we’vepreviously not had the samedemands on us that the privatesector has in terms of the pushdown on costs,” Riordan says.

CO2Sense estimates that a councilcould, if they use a mix of solarenergy and biomass, earn £500,000every year from the energy that theycould generate.

Energy Minister Charles Hendryhas said the Government iscommitted to achieving the UK’senergy through renewables target.

“We are committed to meeting thisand in doing so bring a massiveboost to the UK’s manufacturingindustries,” Hendry told the CBI’srecent energy conference.

But Hendry also recognisescurrent energy market conditionsneed reform in order to helpdeliver enough investment innew plant.

“A quarter of our old power stationsare closing, just as electricitydemand is set to rocket as we moveto using electricity for things liketransport and heating.

“The UK needs to attract more than£110bn investment in new powerstations and grid connections by2020 - that’s double the investmentrate of the last decade - and muchmore beyond that.”

He says the coalitiongovernment’s aim is to appeal toglobal companies and bring themto places like Yorkshire but theymust have a “compelling case” inorder to do so.

The CBI, the business supportorganisation, believes thatrecent changes to governmentenergy policy have put too muchcost pressure on energyintensive sectors and created toomuch uncertainty for investors, withthe need to raise taxes making thesituation more complicated.

Andrew Palmer, CBI regionaldirector for Yorkshire and theHumber, says the Government has“triple-dipped into the industry till”because of the need to raiserevenues, with the CarbonReduction Commitment, CarbonFloor Price and the recent hike inoil and gas tax.

He says: “We need new kinds ofinvestment – particularly frominstitutional investors. TheGovernment has some ideas, anda well-run Green Investment Bankshould attract large-scale capitalfrom pension funds.”

He says the CBI backs thelow-carbon agenda but it must gohand-in-hand with ensuring thesecurity of energy supply and withprotecting the region’s, and theUK’s, industrial competitivenessfrom overseas manufacturers andpower generators.

But Mr Palmer is also optimisticabout how the region can capitaliseon future energy needs.

“There are tremendouspotential opportunities for the UKin the new low-carbon economy,”he says.

“It’s about newer, greenerbusinesses and projects, those thatshould be in the vanguard ofmeeting the low-carbon challenge,and that should be working withtraditional industries to delivereffective solutions.”

The UK needs £110bn investment in power stations

‘The coalitiongovernment’s aim isto bring globalcompanies to placeslike Yorkshire’

CO2Sense saysongoing investmentin renewables will‘change theenergy mix’





YORKSHIRE and theHumber are at the forefrontof the development of thenew technologies whichwill help meet the UK’sfuture energy needs butwith a much lower impacton the environment.

In fact, some of the technologiesbeing pioneered in this regionbuild on Yorkshire’s energysector heritage.

Coal, for many years dismissedas a dirty fuel of the past, is makingits comeback in Yorkshire. A regiononce synonymous with mining coalis now leading the way in showinghow it can play an important role inthe future of power regeneration.

The desire for energy security– reducing the country’sdependence on fuels from foreignsources – and the realities ofdeveloping new technologies haveforced a reappraisal of the role coalcould play in the future if ways canbe found to limit its impact.

Scottish and Southern Energy istrialling carbon capture andstorage (CCS) technology at

Ferrybridge Power Station in acollaboration with Doosan PowerSystems and Vattenfall.

Further south, 2Co Energy ispressing ahead for plans for one ofthe most advanced CCS projectsin the world. The Don Valley PowerProject will see 900MW of powergenerated each year with thecarbon dioxide transported viapipeline to the North Sea whereit can be used to extract oil usinga technique known as enhancedoil recovery.

“Our vision is clean powerproduced for the south east marketproduced from coal in Yorkshireand taking CO2 to the southern endof the North Sea oil field wherethere is the benefit both of storagebut also producing more oil,”says 2Co Energy’s chief executiveLewis Gillies.

“That means you can extend thelife of North Sea oil - if you usethe CO2 properly you canproduce another 8bn barrels of oilfrom the North Sea. That willproduce significant tax revenuesfor the country.

“I would say this project can be ananchor project for the Yorkshirearea. Once you have laid down thatpipeline between Yorkshire and theoil fields you have created anenvironment for investment infurther clean coal plants in the UK.Once that investment is made,

Leading the green energy revolutionTechnologies pioneered in Yorkshire - by James Reed

‘I would say thisproject can be ananchor project forthe Yorkshire area’

‘If you can concentrateactivity in one areayou can bring intalented people andcombine that withnatural resources’



the cost for further plants issignificantly reduced.”

The Don Valley Project has alreadybeen awarded one €180m grantand has been chosen by theGovernment to be put forward tothe European Investment Bankfor further funding.

Meanwhile, the National Gridhas started public consultationon the pipeline that will cutacross Yorkshire before leavingland south of Bridlington. And it isthis pipeline which could helpcreate a renewable cluster effectin the region.

On the shore of the Humber isanother project which mayeventually feed in to the pipeline.Vivergo Fuels, a collaborationbetween BP, British Sugar andDuPont, is building an ethanolrefinery that will eventually produce420m litres of ethanol a year to beblended into transport fuel.

Dave Richards, Vivergo Fuels’managing director, is clear that theregion offered a combination of keycharacteristics which made it anideal location for the project.

“Here you’ve got access to greatport facilities and we need accessinto locations like Rotterdam, whichis a big fuel hub, and the coastalrefineries of the UK. It has also gotthe huge agricultural base – weneed animal feed wheat and this isone of the best areas in the worldfor that. There’s also a goodmanufacturing base here whichmeans there is a base of peoplewith the skills we need.”

Mr Richards is also an advocate ofthe cluster idea. “The clusterapproach is absolutely right. Ifyou are going to solve the world’senergy problems we need lots ofdifferent answers – wind farms,solar, tidal – and if you canconcentrate that activity in onearea you can bring in talentedpeople, universities and combinethat with the natural resources andsupport each other.”

While CCS and ethanol build onthe technologies of the past, theregion is also leading the way inwhat is set to become one of theUK’s major sources of greenenergy, offshore wind.

Siemens is negotiating to build anew turbine manufacturing plant onthe Green Port Hull site but evenbefore that takes shape the areawill take major steps forward in thissector through the HumberGateway scheme.

Green Port Hull development

Vivergo fuels site

‘The HumberGateway is the firststep for what may bea very big industry’

‘We will haveimmediate needs fordifferent activitiesfrom different places’



Power generator E. ON was givenpermission earlier this year for theHumber Gateway project whichwill see around 70 turbinesplaced some 8km off the EastYorkshire coast.

Project manager MatthewSwanwick sees the HumberGateway having short and longterm impacts on the regionaleconomy.

“We will have immediate needsfor different activities from differentplaces. For example we will needsmall boat access forcommissioning crews from localsmall ports and that will mean aneed for accommodation andlight engineering locally. If you lookdown the east coast there are somefairly major ports that are used tosupporting this work.

“There are a number of potentialsuppliers in the area that are on ourradar. There are existing suppliersfor a lot of the services we need buta lot of projects chasing them.Whereas five or six years ago whenwe contracted there were a fewprojects and a lot of suppliers; it’sthe opposite now. The more peoplewe can bring on, that are capableand do a good job – andI am keen for them to be in the UK– the better.

“I think obviously anydevelopment like ours helps togive confidence to investors tobring those facilities in. TheHumber Gateway is probably thefirst step for the region in what inthe future may be a very bigindustry.”

These are just some of the biggerexamples. Across the region dozensof companies are capitalising on thethirst for green energy from ITMPower’s hydrogen fuelling systemsfor vehicles to GWE Biogas’s plantturning food waste into electricity.

The region’s politicians talk ofYorkshire as a future centre ofexcellence for renewabletechnology. In many ways, italready is one.

Humber Gateway project will see around 70 turbines some 8km off the East Yorkshire coast

‘Across the regiondozens of companiesare capitalising onthe thirst for greenenergy’



WHILE there are examplesto be found of the greenenergy revolution inaction across the region,one corner believes itcould be the key driver ofa major change in itseconomic fortunes.The potential for the Humberto become a hub for therenewable energy industry bothon and offshore has inspiredbusinesses and local authoritiesto create a local enterprisepartnership spanning the estuaryfocused on grasping thisopportunity.

The LEP application put it in starkterms: “These developments area once in a generation opportunitywhich could transform oureconomy on a similar scale to howNorth Sea oil and gas transformedAberdeen.

“The Humber could become aEuropean centre for renewableenergy, employing tens ofthousands of people. Theimpact would be seen not onlyin new companies coming tothe area, but also in existinglocal companies throughout thesupply chain.”

The partnership has asked theGovernment for permission tocreate an enterprise zonecovering 350 hectares – morethan double the normal size– to try and attract fourrenewable manufacturers whileHull City Council is asking foraround £40m from the RegionalGrowth Fund to help supplychains firms meet start-up costsand train local people.

‘Thesedevelopments are aonce in a generationopportunity’

Green economyoffers Humberhope

THE technologies areavailable to meet thegrowing energy demandsof consumers and industryand the targets for reducingthe impact of energygeneration on theenvironment are clear.

But that does not mean that thepath that will see the transformationof the country’s energy provision isa clear one.

Despite the significant rises inenergy prices in recent years, newertechnologies remain at acommercial disadvantage and willcontinue to need regulatory supportfor many years to come.

How that support is structuredand which technologies it willunderpin is a source of majordebate both within the energyindustry and with theGovernment as Ministers prepareto publish a White Paper on thefuture of the electricity market andset support levels for renewablesfrom 2013 onwards. Centralproposals will be the replacementof the renewable obligationcertificate scheme with a new“contract for difference”feed-in tariff and the establishment

of a carbon floor price.

While there is no clearconsensus across the industryon the issues, a recurring theme isthe need for clear decisions andlong term policy horizons.

“The most important thing is togive certainty to investors and tothe energy industry in theforthcoming Energy White Paper,”says John Cridland, director-generalof the CBI.

“We don’t want a White Paperheavy on promises of round-tablemeetings and departmentallistening exercises but light onthe boldness and certainty that isrequired.”

The consequences, sometimesunintended, of Governmentdecisions were demonstrated on

a relatively small scale by therecent controversy over thefeed-in tariff for solar energy.

Professor Stephanie Haywood,director of the Centre for AdaptiveScience and Sustainability, saidthere had been a “massiveexpansion” in solar energy as aresult of the Governmentsubsidising installation costs.

“The scheme was aimed at peopleputting photovoltaic on their roofsbut farmers have been putting it intheir fields and for some people it

Delivering a new energy futureMajor obstacles to overcome - by James Reed

‘The most importantthing is to givecertainty to investors’

‘The UK could stillsave up to £12.5bn byspending money ontechnologies that willstill hit the EU’s target’



has become a money makingexercise and that wasn’t theintention.”

After a review the Governmenthas placed new limits on thescheme to limit the subsidy tohome owners.

For some, it is the targets set onenergy that are the problem ratherthan the subsidy regime. Arecent report from the PolicyExchange think tank called for arenegotiation of its commitmentto the European Union’s 2020renewable energy target, arguingthat is unnecessarily expensiveand will actually waste resourcesthat could be better used tofund research in to newtechnologies.

“While the Governmentrenegotiates the renewable target,the UK could still save up to £12.5bn

- enough money to insulate everyUK household’s roof twice over –by spending money ontechnologies that will still hit theEU’s target,” says Simon Less,head of the Policy Exchange’senvironment unit.

And the future shape of the energysector will not be dictated by targetsand financial considerations alone.There are significant concerns, forexample, about what is known asthe Government’s “localism agenda”– a desire to see more decisionstaken closer to where they willhave an impact.

While final decisions over thebiggest energy schemes will still betaken in Whitehall, town halls couldpotentially exercise considerableinfluence of the development of newinfrastructure. This could beparticularly the case fordistributed schemes.

Energy experts argue that the futureof power generation lies not just inmajor power stations but alsosmaller local distributed schemescloser to where the energy is used– for example a combined heat andpower plant on an industrial park– and it is here where planning

permission could become an issueas local opinion becomes a moresignificant factor.

“Planning is a really big concernfor us, it is an area where therehas been some major upheaval.Local authorities are generallyvery starved of resources and theyhave had increasinglycomplicated agendas put on them,”says Leonie Greene, director ofexternal affairs for the RenewableEnergy Association.

“We have been very frustrated asan industry in this area. We arekeen that what should behappening at a local level is thatlocal issues surroundingapplications should be discussedrather than there being an endlessrehearsal of some of the mythsabout renewable energy such asthe noise from wind turbines.

‘For some people ithas become a moneymaking exerciseand that wasn’t theintention’

‘Proposals out of thelocalism agenda willgive more power tovociferous smallanti groups’



”We are very concerned thatsome of the proposals out of thelocalism agenda will give morepower to vociferous small ‘anti’groups rather than reflectmajority opinion.”

The challenge facing town halls inhandling new responsibilities in theenergy arena is something thatacademics in Yorkshire are hopingto help with.

“There are growing expectationsthat cities will be more sustainableso local government is acquiringresponsibilities for energy butvery few have the personnel orexpertise to undertake theseactivities,” says Professor Bill Gale,director of the Centre for IntegratedEnergy Research at the Universityof Leeds.

“We are working on decisionsupport tools to help cities totake an integrated approach tothis issue.”

Professor Gale and his team arelooking to produce computermodels that allow city authorities tounderstand the consequences oftaking particular decisions overenergy schemes.

Decisions taken locally andnationally in the coming months willplay a major role in dictating thesuccess or failure of the country tomeet the energy challenges of thefuture while meeting higherenvironmental standards.

‘There are growingexpectations thatcities will be moresustainable’

YORKSHIRE power generatorDrax has become one of theregion’s most prominent voiceson the issue of support for newenergy technology.

The company last year broughton stream its new £80m co-firingfacility allowing it to generate12.5% of its power from biomassrather than coal. The newtechnology means Drax couldboast last year that it had thehighest renewable output of anysingle facility last year.

But while the plant burned900,000 tonnes of biomass lastyear it has the potential to do muchmore but the company’smanagement say the supportcurrently available for thetechnology makes it uneconomic.

Drax, working with SiemensProject Ventures, has alsoannounced plans for threededicated biomass plants butprogress on these is alsodependent on the shape of futureGovernment support.

“We think Drax remains a valuablestrategic asset. We think Drax canmake a major contribution to theUK’s objectives on climate changeand reduction targets. Biomass iscost effective, it’s low carbon, it’sreliable and it’s also renewable sowe are in a position to help furtherif we get a bit more support,” saysproduction director Peter Emery.

Drax argues that the currentrenewable obligation certificatessystem puts biomass at adisadvantage compared to othertechnologies, such as offshorewind and the Government needsto address this if biomass is toplay a part in meeting futureenergy needs.

“The price of biomass is typicallytwo or three times the cost of coalwhich is why we need some help.Even with the cost of carbon it ismore expensive to burn biomassand that’s why we need theregulatory support like any otherrenewable. Without regulatorysupport no renewable is economicand biomass is no different.

“The Government at themoment has only given biomassa four year horizon so you arelimited with what you can do. Ifyou are going to invest in aproject and need to get a returninside four years it’s not going tobe a very big project. We arehoping the Government will giveus a longer term horizon sopeople can invest.”

Drax makes the case forbiomass support

‘We think Drax canmake a major contributionto the UK’s objectiveson climate change andreduction targets.’

Drax is leading the way on new energy technology



YORKSHIRE has theopportunity to become aworld leader in the energysector but greatercollaboration between thepublic and private sectorswill be key to the regionachieving its potential,according to businessleaders who took part in around table discussion onthe subject.Held at the Leeds office of lawfirm Addleshaw Goddard, thediscussion, chaired byTheBusinessDesk.com’s managingdirector David Parkin, sawbusiness leaders, academics,energy experts and advisers debatethe major opportunities andchallenges facing the Yorkshireregion in order to become anenergy industry leader.

The view around the table wasthat Yorkshire’s energy heritageset it in a good position to capitaliseon opportunities but that therewas still reluctance among manybusinesses to introduce more greenworking practices because ofuncertainty on how it would benefittheir bottom lines.

The discussion saw participantsexchange views on howYorkshire could capitalise on thedevelopment of renewables projectson the East Coast and the Humber,as well as offshore and inmainland Europe to become asupply chain hub.

And the creation of a GreenInvestment Bank was also seenas an opportunity to fund energyprojects in the region.

Richard Goodfellow, partner andhead of energy at AddleshawGoddard, said: “Where are we interms of energy? We’ve got thegeography which plays to ouradvantage. We’ve got a lot of skillsets in Yorkshire such asfinancial services.

Powering the region Collaboration key for energy success - by Ian Briggs

Talking point: The participants in the Yorkshire energy round table.

Attendees:Chairman:David Parkin- Managing Director,TheBusinessDesk.com

Richard Goodfellow- Partner and Head of Energy,Addleshaw Goddard

Simon Pilling- Corporate Finance Partner,Addleshaw Goddard

Owen Michaelson- Managing Director,Property, UK Coal

Tom Riordan- Chief Executive,Leeds City Council

Andrew Palmer- Regional Director,CBI

Dr Andy Young- Director,Hallam University,Sheffield Hallam University

Steve Brown- Director,CO2 Sense

John Lambert- Commercial DirectorMeadow Foods

‘We have advantagesof geography andlocation and skills setsin terms of the heritageof energy productionand generation inYorkshire’



“We’ve got some leadership in thepublic sector which one might havesaid was absent previously. We’vegot some deal originators. But forme, given the size of this region,given all the advantages it’s got,given companies like MeadowFoods and Arla and everyone else,we could do more in Yorkshire.”

Chief executive of Leeds CityCouncil, Tom Riordan, saidYorkshire was at ‘first base’ in termsof launching viable green energyprojects such as wind turbines,Carbon Capture and Storage(CCS) and anaerobic digestion (AD),a process that sees wastetransformed into electricity or gas.

“I think we have advantages ofgeography and location and skillssets in terms of the heritage ofenergy production and generationin Yorkshire which are reallycompetitive advantages if we doindeed take advantages of them,”Riordan said.

“There is an opportunity for us to bethe place that develops the supplychain for many of these newindustries; not just in the East andHumber but also taking advantageof our manufacturing and

engineering skills in Leeds, Bradfordand other places.“But it demands a next gear changeof collaboration between the publicand private sectors which probablyhaven’t yet been achieved. If wework together there are tremendousopportunities.”During a period of heavy job lossesin both the public and privatesectors, Riordan said the energysector could play an important partin employment creation.Independent dairy group MeadowFoods, which has a production siteat Holme-upon-Spalding inYorkshire, is considering investingin green technology but needs moreconvincing that it will be costeffective, according to itscommercial director John Lambert,who also warned that complyingwith government green legislationwas also hitting companies.“The cost of energy to us is about£2m a year and every time you lookat the graphs going forward it’s goingup £200,000 or £300,000 a year,”Lambert said. “We’re beginning tolook at AD and other sorts of greenalternatives which can somehowget us out of this trap we’re in.“The problem with my size ofcompany is that if it doesn’t have a12 month return you move on toanother project.”The costs to businesses ofimplementing green technologies isan issue the CBI is closelymonitoring. Its regional director inYorkshire and the Humber, AndrewPalmer, said: “Part of the work thatour new director general JohnCridland has been doing recentlyhas been looking at some of the keyareas about getting Britain workingagain and one of those is that wehave strong concerns aboutelectricity market reform and thecarbon price on intensive industries.“It’s all about making sure ourmembers can still compete. There’sone construction company whereit’s easier to import all their cementfrom Spain.”Steve Brown, director at CO2Sense,the organisation that helpsbusinesses to cut costs and reduceemissions and waste, said therewas disparity across the region onthe advantages of renewable andclean energy projects within thepublic sector and this was a

frustration for the private sector.“Some authorities know thetechnologies very well and(planning) members are keen onthem to happen, but there are othersthat are very suspicious and gettinga consent for something like an ADplants or a wind farm are quiteproblematic and there’s a big riskon getting financial close on aproject,” Brown said.

Owen Michaelson, managingdirector of UK Coal’s propertydivision, said local authorities hadto grasp better the benefitscompanies dealing with the energysector could bring when consideringissues like planning consents: “Interms of dealing with the publicsector, the thing I always like quotingis the economic impact we have inthe region.“UK Coal turns over £500m in thisregion; that’s a lot of wages paid.Obviously we’re also developing alot of colliery sites; be it for harddevelopment or energy from waste.”Goodfellow and Michaelson agreedthat collaboration could also bedeveloped by the public sector

Andrew Palmer, Yorkshire and HumberCBI regional director

Owen Michaelson of UK Coal makesa point

‘UK Coal turns over£500m in thisregion; that’s a lotof wages paid’

‘The costs of energyare an increasinglylarge factor but it’s yetto really bite, but theshape of the curve isaccelerating’



buying gas and electricity from theprivate sector and selling it on tothe consumer.“When I look at the public sector itjust cries out to me over and overagain there’s great examples wherethe public sector can step in andbuy the power,” said Goodfellow.

Andy Young, a director at energyrelated services venture HallamEnergy, an organisation withinSheffield Hallam University, added:“I see businesses that aregenerating energy, that know whattheir technology is and their corebusiness and what they want to do.Where we see less clarityis on the consumption side. Thecosts of energy are anincreasingly large factor but it’s yetto really bite but the shape of thecurve is accelerating.”And Michaelson argued: “If all thecouncils buy energy from everythingyou flip the economic equation andit’s worth making the investment.If all the councils in Yorkshire saidwe’ll be your best friend and buyeverything off you (and sell theenergy on to tenants andcustomers), and then if planningconsent was given, then 85 to 90%

of projects would get built asopposed to say 50% of them nowand that would create a greateconomic stimulus.”The participants also discussed theways information on the energysector could be shared around theregion and highlighted the key roleuniversities and other academicinstitutions can play in this.Young said: “Universities are notthere to be these ivory towers ofresearch and disengaged from allaround them. We’ve got to makesure when we get involved inresearch it’s not abstracted andirrelevant.”Riordan agreed that informationsharing on successful, andunsuccessful, energy projectswas important.

“We need a way of bringing theseissues to the fore a bit more andgetting those opportunities to thetable and showing that this is whathas worked and this is what needsto be done to get some of theseopportunities started, be it AD orsomething else.

“Every energy from waste plantbeing refused is energy beingthrown away. Where we can linkgeneration and consumption thereare massive wins to be made.”

Participants agreed that theopportunity to attract theGovernment’s £3bn GreenInvestment Bank to Yorkshire wouldbenefit the region. The bank willinvest in areas including offshorewind, waste and energy efficiency.

Simon Pilling, corporate financepartner at Addleshaw Goddard inLeeds, said: “What we have inthe region are people prepared toinvest in opportunities. We’ve got avery strong financial services sectorand a very strong professionalservices sector. I think it’s ineverybody’s interests in this cityto keep as much in the region aswe possibly can.

“If there is to be a GIB investing inopportunities around the market wehave got the infrastructure in thismarket to support that kind oforganisation.”Brown added: “We have the projectsthat the bank will want to fund here.There’s no reason that we couldn’tattract, if not the bank, then a majoroperation of it here.”In conclusion, Goodfellow saidinformation sharing on the costs andbenefits to businesses of implentingand adopting green technologieswas crucial for the success of thesector in the region.

“Where do we want to be? It startsfrom the top with a coherent policyand direction. I’m personally mostinterested in AD as it fits localism.

“It’s all about information. When youlook around Yorkshire we’ve gottremendous opportunities but weneed one ‘touchstone’ forinformation about our existingenergy infrastructure and network.”

Michaelson added: “We have afantastic historic energyinfrastructure in the region so weare very well placed.”

John Lambert of Meadow Foodsargues his case

Tom Riordan, chief executive,Leeds City Council explains

‘Where we can linkgeneration andconsumption thereare massive wins tobe made’

‘What we have in theregion are peopleprepared to invest inopportunities’

‘We have a fantastichistoric energyinfrastructure in theregion so we are verywell placed’



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