North East set for green energy surge with two more CHP plants

Almost £300m is being invested in two new combined heat and power (CHP) plants in Northumberland and Durham.

The biomass CHP plant in Cramlington, Northumberland, will generate 213GWh of renewable electricity annually. Photo: Estover Energy

The biomass CHP plant in Cramlington, Northumberland, will generate 213GWh of renewable electricity annually. Photo: Estover Energy

The Green Investment Bank (GIB) and property developer John Laing Group have today (21 September) committed £48m to a new £138m CHP plant in Cramlington; while a separate investment, also announced today, will see £160m put towards a waste-wood-fired power station in Stockton-on-Tees.


The Cramlington CHP plant will generate 213GWh of renewable electricity annually – enough to power 52,000 homes – with the generated power being split between local pharmaceutical businesses and Norwegian energy firm Statkraft, through a long-term power purchase agreement.

Head of investment banking at the Green Investment Bank, Ed Northam, said: “The Cramlington plant promises to create local jobs, support an industry whose vitality is essential to the growth of the regional economy and help cut UK greenhouse gas emissions while promoting the country’s adoption of green energy sources.”

The GIB will make a £21m investment in the Cramlington project, with John Laing investing in a stake worth £27m. The CHP plant is expected to reduce greenhouse gas emissions by circa 56kt CO2e annually, the equivalent of taking 25,000 cars off the road during its lifetime.

Port Clarence

Meanwhile, 60 miles south of the Cramlington plant, clean energy fund manager Glennmont Partners has announced the purchase of the Port Clarence Energy project in Able Clarence Port on the banks of the River Tees.

The deal is part of a £160m investment programme that will lead to the building of a 40MW waste wood fired power station, creating up to 500 jobs. The plant will supply consume around 250,000 tonnes of waste wood per year, which will be diverted from landfill sites.

The Port Clarence Energy project will provide 40MW of electricity to the grid, along with heat which will be supplied to an adjacent industrial property.

David Watson, chief executive of Temporis Capital – another finance company involved in the scheme - said: “This project will have a significant positive impact on an area that continues to face some considerable economic challenges. We have taken an empty brownfield site and laid the foundations for it to be turned back into production, creating hundreds of jobs.”

Both the Cramlington and Port Clarence Energy projects are expected to come online in 2018.

Hotting up

The North East is fast emerging as the UK’s epicentre for CHP projects. Just last month, edie reported that Teesside would host the world's largest CHP plant, with the announcement of a £424m project to develop a 299MW plant in Middlesbrough.

Earlier in the year, the Association for Decentralised Energy (ADE) said spoke out of the great potential for the rollout of CHP technology in other parts of the country. ADE director Tim Rotheray said: “There are hundreds more commercial and industrial sites that could benefit from generating their own heat and power locally by putting the right policy framework in place.”

According to figures from the Department of Energy and Climate Change (DECC), CHP technology saved the UK £250m in fuel costs in 2014.

Luke Nicholls


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