Can Yorkshire still be nation’s powerhouse in a green future?

Many of its tired nuclear reactors and creaking coal plants are in their twilight years.

Tough rules on emissions and safety mean a quarter of the UK’s generating capacity, the equivalent of about 20 large power stations, must shut down over the next decade. Maintaining power supplies and preventing blackouts will pose huge challenges.

The Government estimates £110bn of investment is needed in new power generating capacity and upgrades to the grid.

Last week it outlined how it intends to fill this power gap – by promoting renewable energy and reforming the electricity market. Its blueprint aims to wean the UK off fossil fuels, especially volatile foreign supplies.

Launching the Renewable Energy Roadmap, energy and climate change secretary Chris Huhne admitted attracting the funds to achieve renewable power generation of 15 per cent by 2020 will be a “Herculean” one.

Home to the vast coal-fired power stations of Drax, Ferrybridge and Eggborough, as well as the likes of Corus steelworks and Saltend refinery, Yorkshire is at the forefront of the biggest shake-up of the power market for years.

A new carbon floor price will hit these plants hard. Due to come into force in 2013, big emitters will be required to pay a top-up if the price of carbon falls below a certain level. The carbon floor price will start at £15.70 a tonne, rising to £20 a tonne by 2020.

Drax has said it will pose a “material additional cost on our electricity generated from coal and thus the cost of electricity for the consumer”.

Engineering body the EEF has warned against making energy-intensive British manufacturing uncompetitive from rising electricity costs.

But reforming Britain’s power supply cannot be done overnight, and Government admits fossil fuels will play a part for many years to come. In 2009, 45 per cent of the UK’s power was generated from gas and 28 per cent from coal.

Cleaning up fossil fuel generation also offers huge opportunities for Yorkshire. The white paper introduced a new Emissions Performance Standard, ruling out new coal power stations without carbon capture and storage (CCS). Trials of this technology that aim to trap carbon and pipe it deep under the North Sea are planned for Drax in Selby, Hatfield near Doncaster and Ferrybridge in West Yorkshire.

“The Government are making a very clear statement of support for CCS by setting an annual limit on the amount of carbon that fossil-fuel power stations can emit,” said Joanne Pollard, chief executive of not-for-profit consultancy CO2Sense.

“This ensures that no power station can be built without CCS – a technology that Yorkshire, with its three proposed CCS projects, is ideally placed to lead.”

Nuclear and renewable power should benefit from plans for a contract-for-difference type of feed-in tariff. This will guarantee suppliers a fixed price for their energy, but also allow the consumer to claw back money if the cost of generation falls. But Ms Pollard warned much more clarity around subsidies is vital before investment in big projects can be signed off. “It is essential that the Government removes any uncertainty around the future value of the energy produced by investors and developers in renewables,” she said.

The renewables plan also singled out eight key technologies –including offshore wind, biomass, marine power and heat pumps – as key to the power revolution.

The strategy outlined a target of 18 gigawatts (GW) of offshore wind capacity by 2020 – up from a previous target of 13GW.

With this should come a corresponding jobs boom. The Government estimates more than 250,000 people already work in the renewable energy sector. By 2020, this could double to more than 500,000, it claims.

Siemens plans to create thousands of jobs in Hull by opening an offshore wind turbine factory, while other energy giants are also considering wind farm factories along the east coast.

Team Humber Marine Alliance director Mark O’Reilly said a growing green power supply chain offers big opportunities.

“Yorkshire and the Humber is well placed to benefit hugely from the enormous opportunities this activity will provide,” he said.

Burning biomass, organic plant-based material, will also play a key role in tackling emissions. Drax welcomed the news. It fitted extra biomass co-firing capacity in 2010 and also plans three standalone dedicated biomass plants under a £2bn investment.

Roadmap’s main points

Carbon floor price so emitters pay top-up if carbon price falls below certain level

Contract-for-difference feed-in tariffs, guaranteeing fixed price for renewables

Emissions Performance Standard so no new coal plants built without carbon capture and storage

Capacity mechanism to ensure future supply

Priority for biomass, wind, marine energy, heat pumps etc

Increase off-shore wind capacity to 18 gigawatts by 2020, from 13GW.