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Go Ahead For Biomass At Lynemouth Power Station

Tuesday, December 1, 2015

GMB Welcome EU Commission Giving Go Ahead For UK Support To Convert Lynemouth Power Station To Biomass

This will help with energy security as once operational the project generates 390MW of reliable low carbon electricity to the national grid says GMB

GMB, the union for energy and engineering construction workers, commented on the announcement that the EU Commission authorises UK support to convert Lynemouth power station in Northumberland to biomass. See notes to editors for copy of press release issued by the European Commission on December 1, 2015 11:45 am and for copy of company response.

Phil Whitehurst, GMB National Officer for Engineering Construction, said “GMB really welcomes this breath of fresh air for the North East after many disappointments of late in this region of high unemployment.

It will safeguard the 134 core workers already working there and its supply chain. Let us hope the Final Investment Decision (FID) is taken as soon as possible by Lynemouth Power so the conversion project can get under way which will also then generate employment in the Engineering Construction sector,

This will help with energy security as once operational the project generates 390MW of reliable low carbon electricity to the national grid.

The National Joint Council (NJC) will be meeting with the owners to discuss categorisation for this work to be done under the National Agreement for the Engineering Construction industry (NAECI).” 

End

Contact: Phil Whitehurst 07968 338810, Stephen Thompkins 07870 176725 or GMB Press Office on 07921 289880 or 07974 251823.

Notes to editors

1 Copy of the EU Commission press release

State aid: Commission authorises UK support to convert Lynemouth power station to biomass

In December 2014 the UK notified plans to subsidise the conversion of the coal-fired Lynemouth power plant to biomass. The plant would be able to generate 420 MW of electricity running exclusively on wood pellets. The UK Government intends to support the project in the form of a premium paid on top of the market price of the electricity generated (a so-called “Contract for Difference”). The project will receive aid until 2027 and, according to UK estimates, will generate about 2.3 TWh of low-carbon electricity per year. The plant is due to use approximately 1.5 million tonnes of wood pellets per year, mainly sourced from the United States, Canada and Europe.

The Commission opened an in-depth investigation in February 2015 to assess whether the terms and conditions of the UK support, and in particular the financial calculations and estimates regarding key cost parameters, would avoid overcompensation. In light of the comments received from interested third parties as well as detailed technical information submitted by the UK, the Commission is now satisfied that the submitted parameters are robust and present no risk of overcompensation.

The Commission’s investigation also did not find any evidence of market distortion in the global wood pellets market. Finally, it is satisfied that the measures will not lead to undue distortions of competition in the market for other wood-based products.

On the basis of this analysis the Commission concluded that the project’s contribution to the European renewable energy and CO2 emissions reduction targets clearly outweighs any potential distortions of competition that could be triggered by the state support.

Background

The Lynemouth plant is one of several projects selected under the Final Investment Decision Enabling for Renewables (FIDeR), a UK support measure for renewable energy projects. In July 2014, the Commission already approved five FIDeR projects to develop offshore wind farms. In January 2015, the Commission also approved construction of the Teesside combined heat and power biomass plant.

The non-confidential version of the decision will be published in the State aid register on the competition website under the case number SA.38762 once eventual confidentiality issues have been resolved. The State Aid Weekly e-News lists new publications of state aid decisions on the internet and in the EU Official Journal.

The above press release was issued by the European Commission on December 1, 2015 11:45 am.

2 Response by Company - Lynemouth Power achieves State Aid

Tuesday 01 December 2015 | 01:39 PM

Vaun Campbell, Managing Director at Lynemouth Power Limited said,” This is fantastic news for the Lynemouth project and the stations 134 strong workforce. As a full coal-to-biomass conversion, this project is a win-win for all involved. The North East region and the local economy also benefits as supply chains and other infrastructure are created.

Once operational the project generates 420MW, with 390MW export of low carbon electricity to the national grid, supporting the Government’s climate change targets.

It has been a long journey with delays to the decision impacting the project but we can finally now move towards hopefully making an investment decision.”

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