Biofuels Watch: biofuelwatch - Biomass on Teeside is a 'roller-coaster'

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http://www.ft.com/cms/s/0/767be134-7a07-11de-b86f-00144feabdc0.html

Fortunes ebb and flow at northern ports

By Chris Tighe and Andrew Bounds

Published: July 26 2009 23:15 | Last updated: July 26 2009 23:15

A short stretch on the south bank of the river Tees exemplifies the roller-coaster ride the east-coast ports of the north of England are experiencing during the recession.

This land is part of Teesport, the UK’s third-biggest port by tonnage, and has been chosen by MGT Power as the site for one of the world’s largest biomass plants, a £500m, 295MW colossus given the go-ahead this month.

It is a coup for PD Ports and gives Teesport’s owner stature in the fast-growing renewables sector. It adds 2.4m tonnes in imported woodchip fuel to the group’s annual cargo processing.

Nearby, Tesco will next month open a £100m, 1.2m sq ft import centre serving northern Britain, boosting Teesport’s container traffic and raising the profile of a port that aspires to develop a £300m deep-sea Northern Gateway container terminal. This project has planning permission and PD Ports wants to press ahead when the recession lifts.

But a mile or so along the Tees towards the river mouth, the Teeside Cast Products works, a huge site dominated by the Redcar blast furnace, awaits news from Corus, its owner, on whether it will continue operating beyond August or be mothballed.

TCP accounts for about 2m tonnes of steel slab exports annually through Teesport. Its iron ore terminal handles up to 8m tonnes of imported ore a year and 1m-2m tonnes of coal. Some other Teeside plants are also threatened with impending closure.

Babcock & Brown Infrastructure, which owns PD Ports, this year put the business, whose main focus is Teesport, up for sale, but the uncertainty surrounding TCP has caused delay.

Martyn Pellew, group development director of PD Ports, says TCP’s difficulty is a “big cloud on the horizon”. However, he insists that “long-term prospects remain remarkably good”. Other power station developments are possible and Teesport’s ambitions in offshore wind farming have been enhanced by this month’s opening of a manufacturing plant on Hartlepool port land by JDR Cable Systems.

Falling land prices in the downturn have also spurred investment. AV Dawson, a family-owned logistics business in Middlesbrough which has a wharf on the Tees and a railhead, is buying land near the river for expansion. “We have witnessed a number of once-in-a-working-lifetime property opportunities,” says Gary Dawson, managing director.

And Peter Stephenson, chairman of Able UK, has submitted plans to North Lincolnshire council for one of the UK’s biggest port-related developments. Able anticipates £100m investment over 10 years at a 1,500-acre site north of Immingham on the Humber’s south bank, creating transport depots, warehousing and business facilities.

Immingham and its three sister ports, Grimsby, Goole and Hull, run by Associated British Ports, together handle about 14 per cent of UK seaborne trade. That volume – 93m tonnes in 2008 – has fallen about 20 per cent, says John Fitzgerald, port director for Immingham and Grimsby.

Spread of trade – from coal to wheat and fertilisers – has helped, but he says it is difficult to forecast in the short term. The port has a bright long-term future and investment plans will go ahead, Mr Fitzgerald says, not least because of the low-carbon revolution.

“Ports and energy have always been linked. They developed in Victorian times to take British coal around the world to fuel the industrial revolution.”

There would be a ready trade in importing material to make biofuels and servicing offshore wind farms, he says.

Drax, the UK’s largest coal-fired power station, has announced plans for a biomass-fuelled plant at Immingham.

ABP also wants to build a cruise terminal at Hull. It would need some public funding, it says, but the economic case is strong.

Cruise passengers spend an average of £120 at each destination and Hull is home to top-flight football and rugby league clubs, and a giant aquarium called The Deep, and offers access to York and the Yorkshire Dales.

The port hosts P&O overnight passenger services to Zeebrugge in Belgium and Rotterdam in the Netherlands, and has deep-water quays where cruise liners could berth.

With cruise tourism contributing more than £5m annually to north-east England’s economy, the Port of Tyne, which was named European port of the year in 2007 and 2008, is developing its cruise business.

Like Immingham and Grimsby, the Tyne has had to cope with the downturn in car manufacturing. It handles exports from Nissan’s Sunderland plant and also Volkswagens imported into the UK. But diversification, backed by £100m investment during the past decade, has strengthened the port. And from struggling in the early 1990s as its traditional core business of coal exports dwindled, it has become a big coal importer.

Smaller east-coast ports have also showed adaptability. The port of Blyth in Northumberland recently announced plans for a £200m biomass plant by Renewable Energy Systems and the north dock of Seaham, once a Durham coal port, is being turned into a marina.

Flexibility and an east-coast location are big assets, but in a recession, Mr Pellew observes: “Bad news comes more quickly than good news.”

Planning law also needs to change. “It’s no good having a wish list for renewable energy and not getting on with it,” he says. “If we’re going to take this economy forward out of recession we need a planning system which helps investment.”

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