Energy giant axes £600m Immingham power plant plan
PLANS for a £600-million biomass-fuelled power plant at Immingham have been scrapped, after lobbying attempts failed to win a change in policy from Government.
The 290MW project would have created 150 permanent jobs while boosting a flat local contracting scene with construction and ongoing maintenance opportunities, employing 850 people in the build out alone.
Proposed for land just outside Port of Immingham's western entrance, the Heron Renewable Energy Plant, a joint venture from Drax Power and Siemens Project Ventures, would have taken feedstock direct from vessels discharging at Humber International Terminal.
But a reluctance to back large-scale dedicated plants, favouring co-firing at converted existing power stations, has led to the decision, hinted at a year ago when the Westminster consultation began. Last October the Telegraph reported how the project was in jeopardy when the "cautious approach" from Government was published.
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A similar plan for Selby was scrapped in February, while a Hull proposal was also ruled out six months after all three schemes were first revealed in October 2008.
Bosses at the power giant had kept Immingham on the agenda until now, chiefly because of the favourable port location. However, a recent proposal to further limit subsidy on pure biomass power generation through capping of the number of renewable obligation certificates that could be traded – the mechanics of the subsidy to encourage "green" generation – was seen as "the last straw".
Melanie Wedgbury, head of external communications for Drax, said: "Unfortunately, and with regret, we have decided to cancel the development of this project.
"In July this year the Government confirmed the future support level was unchanged from the proposal in October which made the investment heavily challenging.
"More pressure was then put on the project in terms of the economic uncertainty regarding the regulatory framework which came out in a consultation paper in early September. That was the final straw, it was quite clear government focus was on driving biomass electricity through conversion of existing coal-fired power stations."
To that end, Drax has this week raised £190 million in a share placing to convert half of the largest power station in Europe to be capable of co-firing biomass with coal, which is transported by train from Immingham, where it is imported.
It feels it now has the mandate with regulatory certainty and the framework to proceed in what will be a £650 million to £700 million project.
Centrica has also canned smaller scale plans for a biomass-fuelled power plant alongside its existing Glanford gas-driven plant at Brigg. That would have been another 50 jobs.
Simon Brett, deputy port manager for ABP at Grimsby and Immingham, said: "While ABP is disappointed that the Heron project is no longer going ahead, ABP continues to work with Drax Power on other opportunities for biomass through the Port of Immingham."
Cleethorpes MP MartinVickers said he was "surprised and disappointed they had pulled the plug before the actual Energy Bill is published in detail".
He said: "These are all tentative projects in the first place. All of these companies are looking for the best deal from a renewable point of view, whether it is biomass, wind or whatever. I know uncertainty is a big problem, and I have made this point, as have colleagues.
"Government is wrestling with incredibly complex area of policy and trying to balance it off."