Peter McCusker Energy & Climate

AMERICAN industrial gases giant Air Products is set to go-ahead with plans for a new £300m power station after winning a £500m contract to supply electricity to the Government. Earlier this year Air Products started work on its first 50MW advanced gasification plant in Billingham. Its plans for the second plant, on land adjacent to the first one, are currently being considered by Stockton Borough Council and if approved Air Products will press ahead with construction after winning the Government contract. In an unusual move, the Government announced it had agreed to a power purchase agreement with Air Products to buy 37MW of electricity from the plant, at a cost of around £25m a year, for 20 years. Air Products will receive a Government subsidy of around £70 per MW/h in addition to the price agreed between the two parties for electricity. The current wholesale price of electricity is around £50 per MW/h. The deal highlights the Government’s desire to support renewable energy p...

A MULTI-MILLION pound sweetener to soften the blow of new measures to cut carbon dioxide emissions will do nothing to alleviate concerns of further carbon leakage, say leading industry figures. The Carbon Floor Price (CFP), which came into effect last week, will net the UK Government over £4 billion in tax revenues over the next few years. Its introduction was announced in the Budget of 2011 and contributed to closure the Lynemouth aluminium smelter with the loss of 600 jobs.  Alcan said the CFP levy would wipe out the Northumberland plant’s annual £40m profit. In an effort to guard against further cases of carbon leakage the Government last month set up a £250m compensation fund to support energy-intensive businesses, but this hardly bears comparison to the £7bn the German Government is offering business to compensate for its renewable energy surcharges. Members of the London-based Energy Intensive Users Group (EIUG) are businesses where energy can account f...