Profile-Lewis Gillies: Aiming to capture a large slice of the booming power market

THE alternative energy market is booming and Lewis Gillies couldn’t be happier.

After six years of working in the carbon capture storage sector, he says the political will for such projects has finally caught up with what the industry is doing.

“The market has considerably changed. The industry has been wanting to commercialise this technology for a while. The political world is moving at the same pace as industry now so it is very exciting,” he says.

After 20 years working for BP, Mr Gillies launched his own company 2Co Energy last year with his Bradford-born business partner Gareth Roberts.

The company’s first project is to drive forward a pioneering carbon capture and storage scheme (CCS) in Yorkshire.

2Co, which is backed by private equity firm TPG, made its first acquisition this month after buying Powerfuel Power from administrators KPMG and is reviving plans for a 900 megawatt clean coal power station next to Hatfield colliery near Doncaster.

The company will work with National Grid on a £3bn project, which has been renamed the Don Valley Power Project, and aims to pump the CO2 into depleted oil fields off the east coast of Scotland, via a 250-mile pipeline. It hopes to use the CO2 to flush out previously inaccessible oil.

The company has pledged to create more about 1,000 jobs during the construction phase, plus another 150 jobs when it begins operation in 2016.

“We decided to buy Powerfuel out of administration for a number of reasons but the predominant reasons are having looked at all the CCS projects in Europe we believe that the fundamentals of this project are far better than any other project we saw in Europe,” says Mr Gillies. “Plus the fact that it had already received a considerable amount of European Funding.”

The cost of bringing the project to fruition for 2Co is £200m. It has already received 180m euros of European Recovery Act funding and the shortfall will be made up by TPG.

Mr Gillies, 43, adds: “We were looking for a project that was large in scale, coal-fed, and sat in the heartland of power generation in the UK.

“The project itself will remain the same but what it will benefit from is the financial strength and experience we bring in executing these types of projects.”

Mr Gillies served as chief executive of Hydrogen Energy International, the former BP/Rio Tinto joint venture, from its formation until the end of 2009 and, prior to that, was head of BP’s hydrogen power business unit of BP Alternative Energy.

During that time he led the development of a number of CCS power projects around the world, including two of the most advanced, in Abu Dhabi and California.

He also led the Peterhead project in Aberdeenshire, the first such project to be fully permitted, although plans were shelved in 2007 after government delays.

“Peterhead was way ahead of its political time and it was a phenomenal learning opportunity,” says Mr Gillies. “However, Powerfuel has the potential to be the most successful project I have been involved in so far because of the political environment in Europe at the moment.”

Mr Gillies lived in Asia, including Tokyo, Singapore, and Jakarta, for four years in the mid nineties. “It was a real eye opener,” he says. “The disparity between rich and poor was quite acute.”

He also spent four years working in the US, primarily in Atlanta and Chicago.

All of which was very different from his upbringing on the Isle of Lewis in the Outer Hebrides, which he describes as a “wonderful” place to grow up. “It was a very safe and caring environment.”

The son of a Harris Tweed weaver, Mr Gillies was the eldest of four children. He says he was always “intent” on working in the energy industry.

He graduated with a degree in mechanical engineering from Aberdeen University and joined BP in 1989 as a graduate trainee chartered engineer, working on several BP petrochemical sites.

Later he managed major capital projects before taking on greater commercial and leadership roles, running a number of BP business lines and ultimately taking on senior management and executive roles where he developed new markets for natural gas sales, negotiated new strategic alliances, led new business ventures and directed both commercial and energy operations.

Carbon capture and storage technology is still a controversial topic, with sceptics claiming it is not economically viable and that government funds should instead be directed at wind, solar and other forms of renewable energy.

Another challenge is public acceptance. The disastrous BP oil spill in the Gulf of Mexico has cast a new shadow of risk over the practice of boring holes beneath the ocean floor.

However, Mr Gillies insists that his experience in the field, combined with that of Mr Roberts, the founder of Denbury Management, which operates a growing network of 700 miles of CO2 pipelines, means they are ideally placed to bring the technology forward.

“CO2 needs to be treated very carefully but providing you have got the experience and competence, carbon capture and storage is not a difficult thing to do,” he says. “The problem is that very few people have that experience.”

He adds: “I know CCS is as competitive as other forms of alternative energy, such as wind, but it is not a replacement. All these things complement each other.”

Mr Gillies is careful to choose his words when I ask him about the BP oil spill last year. “It was a really sad incident where a number of people lost their lives,” he says.

Does he think BP can recover its reputation in the US? “No comment,” he replies.

Although Mr Gillies, lives in Surrey with his wife and three children, he is spending an increasing amount of time in Yorkshire. At the same time, 2Co, is also looking to invest in other projects around the world.

“Yorkshire is the centre of power generation in the UK. It’s the largest cluster of power plants anywhere in the country,” he says.

“They were all built here for one reason: coal. They continue to run on coal and unless they become alternative there will be no future. So it’s our intent to invest some money here and create a future for power generation from coal.”

He adds: “Our aim for 2Co energy is to start with our foothold in Yorkshire and grow it into an international business.”

LEWIS GILLIES FACTFILE

Title: Chief executive of 2co Energy

Date of birth: August 11, 1967

Education: Mechanical engineering degree in Engineering at Aberdeen University

First job: Weaving Harris Tweed

Favourite song: Brown Sugar, by the Rolling Stones

Car driven: BMW

Favourite film: Dances with Wolves

Favourite holiday destination: Indonesia

Last book read: Long Walk to Freedom, by Nelson Mandela

What I am most proud of: Moving from the energy industry to the alternative energy industry