MGT Power puts North Tyneside biomass power plant on hold after U.K. launches review of ROC banding; threat to 1,000 potential new jobs sparks calls by lawmakers for greater commitment to green energy

Audrey Dixon

LOS ANGELES , December 16, 2011 (Industry Intelligence) – Plans by London-based MGT Power Ltd. for a biomass power plant at the Port of Tyne in northeast England are on hold after the U.K. launched a re-evaluation of its Renewables Obligations Certificate (ROC) banding, The Journal of Tyne and Wear reported on Dec. 16.

The risk to 1,000 much-needed potential new jobs in Tyneside linked to the facility has sparked calls for the government to commit to the green energy sector.

The plans MGT Power unveiled for the facility would transform industrial land at the Port of Tyne, North Tyneside. According to MGT's website, The £400 million Tyne Renewable Energy Plant (Tyne REP) is of a similar design to the company's other project in northeast England at Teesport (Tees REP) and will also be one of the world’s largest biomass power stations.

Sourcing sustainable biomass fuels from the U.K. and globally, Tyne REP would generate around 2.4 TWhrs of electricity each year, enough to power 600,000 homes. The power station is expected to produce as much renewable electricity in a year as a 1,000-MW wind farm and help to meet the EU’s renewable energy target of 20% by 2020, accounting for 5% of the U.K.’s target, while saving about 1.2 million tonnes of CO2 per year when it enters commercial operation in 2015.

But a spokesperson for MGT confirmed to The Journal that development of the project was on hold until the issues surrounding the Government’s review of ROC banding and related issues are addressed.

MGT's other biomass energy project under way in nearby Teesport “is further advanced and has all the necessary consents in place,” the spokesperson said. According to MGT's website, that is also a £400 million plant and will generate around 2.4 TWhrs of electricity each year from sustainable biomass sources, enough to power 600,000 homes.

Energy suppliers in the U.K. are required to source a certain number of units from environmentally friendly sources, but under revised proposals for the ROC, the value of biomass, as well as that of other renewable energy sources, will drop, The Journal noted.

Although MGT's spokesperson said the company was still committed to the Tyneside project, the uncertainties surrounding the ROC banding have left a question mark over it that has galvanized local politicians into action.

North Tyneside MP Mary Glindon said she would “urgently raise the issue of ROCs with the government” to promote the chance of the biomass power plant being built, and Newcastle Central MP Chi Onwurah said the government’s energy policies were “sapping confidence in the industry as a whole.” He called on the government to show leadership to help build the U.K.’s renewables industry.

The primary source of this article is The Journal, Newcastle, U.K., Dec. 16, 2011.

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