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GE, BP, Nissan grow green industrial base in northeast England
Cleantech manufacturers are ramping up in and around the planned Teesside freeport in northeast England, where hydrogen producer BP, American wind turbine giant GE, and Japanese electric vehicle maker Nissan announced expansion plans in March.
The UK government leveraged January's long-awaited departure from the EU and this month's annual budget unveiling to promise eight portside industrial zones to be known as freeports, including at the seaport of Teesside. Free zones in places like Dubai and China can incubate emerging businesses and fulfill trade ambitions. EU rules limit the ability of the UK's neighbors to set up fully-fledged free zones, according to charity Full Fact.
The benefit of the freeports for manufacturers with sites within them is that they don't have to pay certain taxes and fees to import materials and can re-export manufactured goods prior to tailoring them to meet regional standards. Manufacturers responded positively to a consultation on the zones last year, Irwin Mitchell construction and engineering partner Edward Davies told IHS Markit.
Not only is the government enticing manufacturers that supply cleantech goods and services, it is also pressuring them to consume greener energy supplies. The UK last week launched its industrial decarbonization strategy, which will act on industrial emissions in place of the EU Emissions Trading System.
The strategy follows a slew of UK greening targets, laid out in a 10-point plan for a Green Industrial Revolution released in November, an Energy White Paper in December, and in the wake of its "world first" national net-zero target.
Offshore wind power plant for GE in Teesside
GE's wind turbine blade manufacturing plant on Teesside would be operated by its manufacturing subsidiary, LM Wind Power, and extend its existing grid manufacturing and testing footprint in the UK.
If approved by financing parties, the plant will manufacture 107-meter-long blades for Haliade-X 14 MW wind turbines, the same wind turbine GE agreed to supply to the 3.6-GW Dogger Bank offshore wind farm planned for UK North Sea waters.
The trio of developers building Dogger Bank are the UK utility SSE Renewables, Norwegian state-backed energy group Equinor, and Italian energy company Eni. They began Dogger Bank's onshore construction in 2020.
In addition to wind projects in UK North Sea waters, the plant will enable GE to efficiently meet demand elsewhere in Europe, a GE spokesperson said in an email to IHS Markit. The other leading European offshore wind markets include Denmark, the Netherlands and Germany, which are among the top countries adding offshore wind capacity.
Wind turbine manufacturers compete on the efficiency of logistics offered for gigantic equipment such as wind turbine blades. "Success in the offshore industry is very turbine-focused ... GE is now competing on equal footing with [Siemens Gamesa Renewable Energy] and Vestas with its uprated 14 MW Haliade-X machine. So, the announcement also testifies to the bullishness of the company, and their confidence in being able to rack up orders going forward," said IHS Markit Senior Analyst Indra Mukherjee.
LM Wind Power closed factories in Denmark and the US last year, citing the need to co-locate prototype testing and serial production, a pragmatic move considering component size and cost of transport of GE's latest wind turbines. "This new factory could possibly be a good candidate for that and fits very well in the cost strategy LM has laid out," said Mukherjee.
"Ultimately, the UK is Europe's largest offshore market and has consolidated a lot of the talent, expertise, and supply chain," he added.
BP makes low-carbon hydrogen in Teesside
BP last week announced it would build a hydrogen production facility, which it will integrate with its existing carbon capture and storage (CCUS) projects nearby. The H2Teesside facility will supply natural gas-based hydrogen as a fuel for industry, residential heating, and heavy transportation. The blue hydrogen will also be mixed with biofuel or green hydrogen to create what BP called sustainable fuels.
The North Sea promises a gigaton of potential storage for the carbon dioxide byproduct of blue hydrogen production, and it also been highlighted as one of the world's most geographically suitable regions in a recent UN report.
H2Teesside will work with BP's two existing CCUS demonstration projects with international majors. The first one, Net Zero Teesside, is a CCUS partnership between BP, Eni, Equinor, Shell, and Total launched by the Oil and Gas Climate Initiative (OGCI) in 2019. The OGCI is a UK-headquartered coalition. The other, launched last year, is the offshore-focused Northern Endurance Partnership (NEP), a grouping of the same companies plus British gas and electric grid operator and utility owner National Grid.
The UK government plans to further boost CCUS and low-carbon hydrogen infrastructure, with additional funding offered through its industrial decarbonization strategy, according to a memo by law firm Pinsent Masons.
Nissan further decarbonizes Sunderland EV facility
The maker of the Leaf mass-market electric vehicle, Nissan, also said it will soon submit a planning application to build out an extension to its solar farm at its electric vehicle plant in Sunderland, north of Teesside.
The automaker aims to add a 20-MW extension to its existing 4.75-MW solar farm, a complement to the facility's 6.6-MW of wind capacity.
Nissan began integrating renewable energy sources in Sunderland in 2005. In January, it set a 2050 goalpost for carbon neutrality across its operations and product lifecycle. Once the solar farm is complete, all of the renewables at the location would supply 20% of the plant's energy needs or "enough to build every single zero-emission Nissan Leaf sold in Europe."
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