Baglan Bay highlights energy policy question mark

Critics of the UK government`s policy on the restriction of new gas fired power plants claim that Baglan Bay is a blatant vote-winning U-turn. But the issues are more complex, and politics aside, this promises to be an innovative, landmark project.

Siân Green reports.

The UK`s secretary of state for trade and industry, Stephen Byers, announced in early April that the government would not object to the proposed Baglan Bay gas-fired power plant near Swansea. The statement giving Section 14 approval came as a surprise to many as it appeared to contravene the government`s policy on natural gas fired power station consents.

The project will now undergo planning and environmental consultation to secure its final consent, and providing that all goes smoothly, construction on the £300m ($486m) project could begin this summer.

The Baglan power plant will be the heart of a so-called `energy park` on BP`s Baglan Bay chemicals site in south Wales. The park is a joint development between the Welsh Development Agency (WDA), BP Chemicals and Neath Port Talbot County Borough Council.

It aims to regenerate and attract business to a region which is suffering economically. It will do this through the lure of cheap energy – Baglan Energy Park users will enjoy up to 30 per cent lower energy bills.

The 500 MW combined cycle cogeneration plant will provide heat and power to BP`s Isopropanol facility as well as to other industries on the site. Excess power will be exported to the national grid. Significantly, the plant will feature GE`s advanced H gas turbine technology, which will bring the efficiencies of combined cycle power plants to the 60 per cent level – a landmark in power plant technology development.

But the government`s decision brought harsh criticism, particularly from the political arena. The announcement coincided with the beginning of the Welsh Assembly election campaign, and the government was accused of reneging on its policy to win votes in Wales. Byers, however, maintains that he cleared the scheme because of its “potential benefits … in terms of local employment and economic regeneration”.

In October last year the government unveiled an energy policy which included the strategy of severely restricting consents for new gas fired power plants. The aim of this policy is to ensure secure, diverse and sustainable supplies of energy, and to remove distortions in the market which it believed had been partly created by the growing dominance of natural gas in the generation mix.

However, the White Paper indicates that certain types of generating plant may have benefits that outweigh the government`s concerns about new gas fired plants. These include combined heat and power stations, projects supporting environmental objectives, and plants with dual firing and black start capabilities.

It can be argued that Baglan fulfils these conditions. It is a combined heat and power plant that could reach a thermal efficiency of over 70 per cent. It will have a black start capability that will enhance security of supply in the region, and it will be a showcase for GE`s H system, a key feature of which is its environmental performance. The use of advanced materials and steam cooling enable operation at a higher firing temperature, resulting in higher efficiencies without an increase in emissions.

But while the Baglan project displays these obvious benefits, Byers concluded that “these benefits would not be sufficiently great in themselves to justify exceptional treatment”. So what clinched it for Baglan?

BP Amoco`s initial proposal for a power plant at Baglan fell foul of the White Paper. According to David Stephens, Communications Manager of BP-Amoco`s Baglan Bay site, the company submitted a Section 36 application in November 1996 for a 1100 MW power plant. This application went through the consultation process, but was held up by the government`s energy review. “By October 1998 we realised that there was little hope,” said Stephens.

An application by GE for a 1000 MW power plant featuring two H gas turbines at Fleetwood, Lancashire suffered a similar fate. “This is when BP and GE started talking,” said Stephens. “We took the best features from each plant and combined our applications.” The result was the 500 MW H technology combined cycle cogeneration plant.

BP-Amoco sees the energy park as a unique concept for supplying electricity to industrial users and as an opportunity for inward investment and industrial development in the area. The new power plant is important because the existing 30-year old oil-fired plant at the site would not be able to support such a development.

The Neath and Port Talbot area suffers high unemployment and depends on manufacturing and heavy industries which have taken a downturn in recent years. Around 35 per cent of employment in the area is in manufacturing, compared with 18 per cent for the whole of Great Britain, and employment in this sector has fallen by 59 per cent since 1980.

The first two phases of the energy park have the potential to support 6000 jobs, based on a WDA benchmark of 30 jobs per acre. The site could eventually reach 1000 acres and so support many more jobs.

It is these socio-economic factors which appear to have secured the government`s consent for BP-Amoco – they come under the guise of “planning, environmental and local issues” where the government can rule exceptions to the White Paper. But these factors were also present in BP`s first application, so perhaps the government has been sweetened by the prospect of elections in Wales.

This would not be the first time that a government had used energy policy to its political advantage, but let`s not forget the technology. The H system is a landmark development, and the Baglan Energy Park could be instrumental in proving its capabilities and setting new global standards for power plant performance in the 21st century.