At the vanguard of change: The North East and the green industrial revolution

The North East’s central role in the green industrial revolution

Welcome to VISION 2031, the campaign launched by North East Times Magazine that will lay out a blueprint for how our region can stand at the vanguard of global, environmentally-focused progress across the next ten years. 

Over the coming months, VISION 2031 – with support from North East Times’ partners Northstar Ventures, main sponsor Northern Accelerator, EY, Jackson Hogg, Lloyds Banking Group and Weightmans – will pinpoint areas of success, innovation and improvement to drive the region forward.

Here, in the first high-level roundtable event of the series, individuals from a number of leading organisations assess the area’s prowess in spearheading the green industrial revolution.

 

Words by Steven Hugill

Photography by Angela Carrington 

There’s a storm brewing in the North East – and it’s got the potential to create an almighty power surge.

Once the cradle of the railways, today the region is nurturing another brainchild: the green industrial revolution.

From Nissan’s £1 billion EV36Zero development alongside Envision AESC – which promises a new all-electric model and battery factory – to Britishvolt’s automotive power pack plant on former Northumberland coal-fired power station land, the scene is rapidly evolving.

Add in the Faraday Institution’s regional office at Newcastle University, the Driving the Electric Revolution (DER) programme – which will establish a power electronics, machines and drives component supply chain – the Sunderland-based DER Industrialisation Centre and the North East Battery Alliance, and the region’s place at the forefront of change becomes clearer still.

But other clusters too are showcasing their potential to lead sustainable, knowledge-driven, economic development and growth.

From the Blyth-based Offshore Renewable Energy Catapult to Equinor’s decision to lay foundations at Port of Tyne to operate the North Sea-based Dogger Bank Wind Farm and SeAH Wind’s £400 million Teesside arrival, much is happening around offshore power.

Staying in the south of the region – which already produces more than half of the UK’s hydrogen – and the Teesworks venture is transforming ex-Redcar iron and steel land into a green energy hub.

The endeavour includes Net Zero Teesside Power, which is headed by BP and moving ever closer to delivering a gas-fired power station with next generation carbon capture and storage capabilities.

Additionally, Newcastle University, alongside Northern Gas Networks, Northern Powergrid and Northumbrian Water, has established the InTEGRel industrial testbed, with digital twinning through Siemens Mindsphere, on Newcastle Helix, to deliver an integrated, low-carbon energy system.

The North East has a proud heritage of breaking new ground.

And it has much promise to lead from the front again when it comes to the green industrial revolution.

WHERE DOES THE NORTH EAST STAND IN THE GREEN INDUSTRIAL REVOLUTION?

To site the region’s place in a new commercial era, requires first to look at what went before, to the birth of the railway, the ‘black gold’ of coal mining and the days when huge ships loomed large over residential rooftops.

All were economic dynamos that drove the North East and its economy, providing employment for thousands and fuelling the region’s reputation as an industrial powerhouse.

Today, the railways have shifted from steam power, the mines’ winding towers have long since made their final turns, and the shadows of the shipyard superstructures have disappeared.

Out of change, though, comes opportunity, and where carbon-intensive industry once prevailed, today a new age of clean energy and sustainability is taking over.

And for the North East, charged by its forefathers’ pioneering and ambitious spirit, this rapidly transitioning landscape represents significant potential.

So much so, Mike Capaldi, dean of innovation and business at Newcastle University, told the VISION 2031 roundtable the region is ready to lead again.

He said: “The North East used to be the centre of UK industry; it once made 40 per cent of the world’s ships.

“But it dropped away.

“The South East has grown, and the North East has competition from the ‘golden triangle’ (the university cities of Cambridge, Oxford and London) and the Midlands, so it has to fight much harder.

“But, if you look at new technologies in batteries, power electronics, machines and drives, offshore wind and cable technology, the North East is going to be a major contributor to the green revolution.

“There is almost a second industrial revolution starting here.”

Mike found support from Tom Nightingale, North East stakeholder manager at Equinor – which will oversee operation of Dogger Bank Wind Farm – who pointed to the region’s knowledge base.

He said: “There are some well-established clusters around the UK when it comes to offshore wind, and I would say the North East is the strongest.

“We have very good industrial heritage, thanks to the region’s oil and gas experience, and the ability to transfer that to offshore wind.”

Professor James Widmer, founder and chief executive of Washington-based electric motor and powertrain system maker Advanced Electric Machines, added: “The region has really exciting potential.

“The fact we already have a (Nissan) battery plant, and have another two (Envision AESC and Britishvolt) going up, is a huge boost, as is the work around offshore wind.”

Gary Chapman, co-head of North region and director – industrials and infrastructure – at Lloyds Banking Group, also nodded towards the region’s infrastructure, highlighting the prowess of its marine bases, and the swathes of greenfield and brownfield space at prospective companies’ disposal.

He also spotlighted Teesside’s Government-backed freeport status as a chief catalyst in catapulting the area into the consciousness of investors, both national and global.

Incorporating Teesside International Airport and the Teesworks development, the freeport offers tenants trade incentives including tax reliefs and simplified customs procedures.

Gary said: “We have high-quality assets, from the ports of Blyth, Tyne, Sunderland and Teesport, to the freeport area.

“There is a huge bank of land available to support the supply chain for the likes of Dogger Bank too.

“For every job created in a port, there are three created in the real economy, so these are great assets to be stimulated.

“And because sterling has depreciated against the dollar over the last 12 months, sterling assets are far more attractive than they have ever been.”

The positivity was echoed by Alex Fogal, associate partner at Newcastle-based professional services firm EY.

She said: “If you look across the North East energy sector, there is far more happening here than across the North as a whole.

“I was in London recently, and the number of comments about what is happening in our region far outstripped anything happening in the capital.

“Our region is the place to be.”

Alex’s optimism was backed by Paul Wigham, partner at Newcastle-based law firm Weightmans.

He said: “New funds are coming to the region, people are listening more, and we are starting to break through in terms of the clean energy and offshore wind message.”

And the region’s repute was further emphasised by Professor Tony Roskilly, chair of Energy Systems at Durham University and director of Durham Energy Institute.

He added: “There are other regions that have had a higher profile, and done well to promote themselves, but the North East is catching up.

“The hydrogen and carbon capture and storage projects provide huge opportunities.”

 

INTEREST AND INVESTMENT IN THE REGION IS PALPABLE, BUT MUST THE NORTH EAST DO MORE TO MAINTAIN ITS MOMENTUM?

Barring its Brexit wobble, Nissan’s near four-decade residence on Wearside has long acted as a kingpin for the North East in terms of raising its standing as a place to lay commercial roots.

As well as making millions of cars, including its flagship all-electric Leaf hatchback, the Japanese company has acted as a lodestone in the creation of a sprawling Washington ecosystem around its equally expansive factory.

And, said Dominic Endicott, director at Newcastle-based investment house Northstar Ventures, it is an ethos that must be channelled to ensure the region’s place at the vanguard of the green industrial revolution.

He said: “The quantum of opportunity in the North East, when you look at the collective across infrastructure, regeneration and start-ups and scale-ups, is a really big number.

“And what we need to say to investors is, ‘we are the premier of energy – we will be truly outstanding against other regions’.

“We need to integrate our story and feed it into the city in a way it will understand.

“We must show investors they can re-invent themselves up here, that they can create a hub of attraction in the region, that we are the place to come and build.

“There aren’t many places that can show progress quickly, and that represents an amazing opportunity for the North East.

“The moment investors see the business opportunities, they will get on the train.

“We should be getting ahead of the curve.”

Chris Beck, director of clean growth and innovation at Tees Valley Combined Authority, concurred, saying the region’s impetus will be maintained by complementing its inventive spirit with tangible investment.

He said: “We are at a precipice, a turning point; we’re going from nice ideas to seeing reality happen.

“We’re seeing offshore wind with UK content coming through in Newcastle and Blyth, and on Teesside we’re seeing carbon capture and storage.

“But if we are really going to make this region different, we’ve got to start looking at how we commercialise it, not just the university spin-outs, but how do we get those big companies in, and get the cluster effect going, so we can grow around it?”

“The big firms are where the capital and skills are,” agreed Neil Spann, chief executive at Seaham-based solar film developer Power Roll.

“How are we empowering the big corporates to the table?

“They need to be part of the ecosystem because they can accelerate processes.”

Tom was equally approving, highlighting the impact of Equinor’s work with the national Catapult network, which includes the Blyth-based National Renewable Energy Centre.

He said: “As a region, this is our opportunity to lose.

“We’ve done a lot of work with the Catapult, and I’d like to see more large centres of innovation like that, because they draw in more businesses.

“The North East is so well positioned with its many big projects, and we need to build on the momentum.

“And supply chains are really important to that.

“It’s not always easy, but as soon as you get one big project, and you can get the supply chain to come, that is a huge advantage.”

Prof Roskilly, who is also a member of the Hydrogen Advisory Council Research and Innovation Working Group, added: “The region has to embrace the circular economy.

“That will be really important to the sustainability of the supply chain.”

IS THE REGION DOING ENOUGH RESEARCH AND DEVELOPMENT, AND ACCESSING THE NECESSARY SUPPORT CHANNELS, TO PUSH FORWARD ITS GREEN AGENDA?

Roundtable members heard figures that highlighted a disparity in North East research and development (R&D) spend, compared to the rest of the country, with outlay per capita standing at £375 in the region, compared to a UK average of around £550.

Exploring those numbers, Dr Tim Hammond, director of commercialisation and economic development at Durham University, and lead of Northern Accelerator – the collaboration between the North East’s academic institutions that turns research into real-world applications – said there was a defined need to encourage greater R&D spend.

Alex agreed, but issued some caution around organisations’ understanding of their ability to tap into R&D support.

She said: “A lot of businesses, regardless of size, are doing lots of R&D.

“However, there is an education we still need to do in the region, in terms of accessing R&D.”

Chris added: “R&D and innovation is absolutely critical, especially when you break the numbers down.

“Take, for example, Teesside, where we get so little Government R&D – if we got the same amount as places like Cambridge, we’d have no unemployment.”

HOW COULD THE REGION FURTHER STIMULATE INVESTMENT IN THE GREEN ECONOMY SUPPLY CHAIN?

Using the example of Middlesbrough-headquartered GB Bank, which has pledged a £3 billion lending boost to the property sector, Dominic asked whether something similar could be introduced to boost the green supply chain.

GB Bank offers loans of between £500,000 and £5 million to developers, small and medium-sized businesses and construction companies, which it says will help create more than 100,000 jobs, several million square feet of office space and 20,000 homes over the coming years.

And the idea of transposing its blueprint to the North East’s role in the green industrial revolution was not lost on Gary.

He said: “We’ve set up a regional regeneration team to look at incremental lending opportunities over and above the large infrastructure assets.

“We are spending huge amounts of time looking at getting behind regional regeneration.

“We see the opportunities.”

 

 

A KEY STRENGTH OF THE NORTH EAST ARE ITS FIVE UNIVERSITIES, WHICH – BOOSTED BY THE COLLABORATIVE NORTHERN ACCELERATOR PROGRAMME – ARE TRANSFORMING RESEARCH INTO WORLD-LEADING INNOVATION. HOW IMPORTANT A ROLE WILL THE INSTITUTIONS PLAY IN THE REGION’S GREEN AGENDA?

“Where we have done well, and where we need to do more, is the collaboration between the universities,” said Prof Roskilly.

“We have, for example, collaborated very successfully with Teesside around hydrogen activity.

“As a region, we are more collegiate.

“Most projects are multi-discipline, and we have got the strength across the universities to provide the skills needed to compete not just in the UK, but internationally.”

Chris said: “The collaboration really comes through, and that doesn’t happen in a lot of other regions.

“It’s a strength we should recognise.”

Paul added: “Certainly, over the last 15 to 20 years, I’ve seen a big change in the way the universities have come together.

“It’s fundamental for the North East because we don’t have that many private sector investors and collaborators rushing to us.

“What the universities are doing is good to see.”

Tom was equally effusive, underscoring the strength of the academic ecosystem from Equinor’s perspective as a company arriving in the region.

He said: “Across the wider energy arena, the region has projects like Net Zero Teesside Power, but where I think it probably excels is that an ecosystem has been bubbling away and building for many years around the universities.

“And the universities have projects we’ve found so easy to join and support.”

 

 

SKILLED WORKERS ARE THE BACKBONE OF SUCCESSFUL COMMERCIAL VENTURES. BUT DOES THE NORTH EAST HAVE A SUFFICIENTLY STRONG, AND PRACTISED, EMPLOYEE BASE TO DRIVE FORWARD THE GREEN INDUSTRIAL REVOLUTION? AND IF NOT, WHAT ACTION IS TAKING PLACE TO STRENGTHEN THE TALENT POOL?

Having an engineering and manufacturing heritage is one thing, but harnessing that legacy to write a new chapter in the North East’s industrial story is something entirely different.

And the panellists were united in their belief that while the region has many plus points in leading the green agenda, a major negative could be a lack of skills, with much discussion over the need for a robust talent pipeline and retraining programmes so workers can traverse sectors.

Mike said: “The elephant in the room is that the North East still has the lowest school-leaver attainment level in the UK.

“Unless we get to grips with that, it’s going to be tough to see how we can supply the workforce capable of fuelling this industrial development.

“Another challenge is that because technology is moving so fast, a lot of schools and colleges don’t know what the future holds, and what they should be teaching.

“At the moment, we’re not set up to create and provide a workforce that’s going to feed the beast.

“We need to get the number of engineering graduates up again.

“We need to talk to schoolchildren about the great things that are happening around electrification and green energy, to get them excited so they want to build things and come out as engineers, rather than media stars.”

He added: “But it’s about reskilling too.

“We need the infrastructure and capabilities in place, for example, to retrain people working on combustion engines to electric vehicles.”

Prof Widmer agreed, saying a strong skills base would add greater weight to the North East’s investment pull.

He said: “Regionally, we are fantastic at making things and for fundamental research, but there is a gap in between at the moment.

“If we get the skills here, the companies will follow.”

Chris, however, issued some caution, warning the fostering of young talent before a jobs environment is truly engrained runs risk of merely adding to the region’s ‘brain drain’, wherein workers have decamped to other UK cities and geographies in search of career progression.

He said: “You cannot train people up until you have the jobs.

“We have to balance skills with opportunities.

“We need to see where industry is going, and play to our strengths.”

He added: “A frustration I have around training is when people say, ‘we need to do new skills for hydrogen’ – we don’t.

“A boiler fitter is a boiler fitter – what they need to be able to do is fit a hydrogen boiler as well as a gas boiler.

“A car mechanic is a car mechanic, and they need to work on an electric or hydrogen vehicle.

“It’s about retraining.”

Richard Hogg, chief executive at Newcastle and Teesside-based specialist recruitment and outsourced people services partner Jackson Hogg, took the discussion further, advocating a system that allows a much more efficient reallocation of skills.

“There is a lot of movement across the sectors, and there is such a need for collaboration, probably far more than what is happening now,” said Richard, whose company works with clients across the science, technology, engineering and manufacturing (STEM) industries.

He added: “Oil and gas skills are massively transferable to other sectors.

“The question is, how can we better move resources between all of the different opportunities?

“What the market needs, in abundance, is very fast reskilling and upskilling, and courses that can transition to different sectors to cope with demand.”

 

DEVELOPING AND TRANSFERRING SKILLS IS FUNDAMENTAL TO GROWTH, BUT SO TOO IS CREATING AN ENVIRONMENT IN WHICH EVERYONE CAN FLOURISH. IS THE REGION DOING ENOUGH TO MAKE SURE ITS SUSTAINABILITY DRIVE IS DIVERSE AND INCLUSIVE?

“We need to push much more diversity,” said Tom.

“One of the things we’re trying to do is university scholarships.

“I go around schools promoting offshore wind and Dogger Bank – having that connection between industry and education is critically important.

“You can’t be what you can’t see.”

Tom’s latter point was taken up by Richard, who highlighted an existing gender divide across areas such as engineering and manufacturing.

He said: “There is not enough senior female talent – there is a real gulf, so anything that can be done to reduce that would be welcomed.”

And Richard found support from Chi Onwurah, MP for Newcastle Central and chair of the all-party parliamentary group for diversity and inclusion in STEM.

The Chartered electrical engineer told the roundtable an ambassador programme was needed, to catalyse interest in youngsters while eliminating career stereotypes.

She said: “We know young people react best to other young people, so having young engineers, from diverse backgrounds, going into schools and talking to students is something we could do.”

 

THE NORTH EAST HAS MANY STRONG CONSTITUENT PARTS TO PUSH FORWARD THE GREEN INDUSTRIAL REVOLUTION, BUT DO SUB-REGIONAL DIVIDES THREATEN PROGRESS? DOES IT NEED TO CONVEY A MORE COHESIVE MESSAGE?

Stand on the football terraces of any North East team, and it doesn’t take long to get a handle on the rivalry towards clubs elsewhere in the region.

It may seem a rather extreme example, but it has felt, for a good while, that the North East itself has been somewhat fractured.

That was certainly the feeling of roundtable members, who said to truly compete – and succeed – against competitors and secure fresh investment and jobs, the region must come together with a united voice.

The situation was laid bare by Mike, who spoke of conversations businesses had previously held with Lord Grimstone, the ex-minister for investment at the Department for International Trade, and the Department for Business, Energy and Industrial Strategy.

He said: “We held a North East Battery Alliance dinner, where three people said they’d been speaking to Lord Grimstone.

“He said to each of them separately that one of the problems with the North East is that ‘we keep seeing lots of different people with lots of different messages’.

“What we need is a coherent, consistent message.”

Prof Widmer agreed.

He said: “There is a unity problem – the south of the region is competing with the north, which is competing with the middle.

“At the moment, we don’t look like a cohesive region to the outside.

“We need to get together, devise a strategy and get on with it.”

Alex concurred, saying the time has come to bring the commercial environment closer.

She said: “If all of us around the table started talking in the same language, and started using the same statistics, that would be very powerful.

“If we could bring all the educators together in one room, build the vision and make them feel the empowerment, that would be a big step towards building a collaborative ecosystem.

“By bringing businesses together, from large and small, you share the same outlook, and it is the next step in making change happen.”

Alex found support from Richard, who said “it is important to present things in a coherent way, so people can understand what they can invest in”.

Dominic too urged clarity, saying “we need to sharpen our story to be really distinctive, if we want London and the city to engage.”

And Alex was backed by Neil, who said the creation of a single narrative would provide much potential, not least in showcasing the North East’s prowess that would, in turn, present openings to secure work presently taking place abroad.

He added: “The opportunity to create manufacturing in the UK, and the North East, is massive.

“The model of making things in China and shipping things around the world, is going to change.

“The opportunity is right now; Made In Britain is a strong badge.”

 

 

LOOKING ACROSS THE NEXT DECADE TO 2031, WHAT DOES THE NORTH EAST NEED TO DO TO LEAD THE GREEN INDUSTRIAL REVOLUTION? AND HOW WILL SUCCESS BE MARKED? 

“It’s about looking at co-ordinating where the innovation is coming from, aligning it with the direction of market travel and the infrastructure needed to deliver it,” said Dr Hammond.

He added: “It’s great to have ideas, but we need the means to take them forward.

“How we’re taking innovation forward is very important – whether it is transport, energy, insulation or decarbonising construction, it is one big picture.”

Prof Widmer said spades in the ground would signify progress.

He said: “We need some successes; Britishvolt has been brilliant, but we need more of those, and we need to grow our own.”

Chris added: “We need to talk ourselves up.

“And on top of that, there are three areas we must focus on – skills, opportunity and pride.

“You’ve got to have the skills to do the job, you’ve got to have the opportunities for residents to earn a good living, and you’ve got to have pride in the place you live.

“If we get those things right, we’ve delivered.

“Clean growth fits us beautifully with our offshore, engineering and manufacturing past.

“We are at the cusp of the wave.”

Roundtable panellists:

• Dominic Endicott, Director, Northstar Ventures
• Dr Tim Hammond, Director of commercialisation and economic development, Durham University; project lead, Northern Accelerator
• Alex Fogal, Associate partner, EY
• Richard Hogg, Chief executive, Jackson Hogg
• Gary Chapman, Co-head of North region and director – industrials and infrastructure, Lloyds Banking Group
• Paul Wigham, Partner, Weightmans
• Professor James Widmer, Founder and chief executive, Advanced Electric Machines
• Professor Tony Roskilly, Chair of energy systems at Durham University; director of Durham Energy Institute; member of the Hydrogen Advisory Council Research and Innovation Working Group
• Mike Capaldi, Dean of innovation and business, Newcastle University
• Chris Beck, Director of clean growth and innovation, Tees Valley Combined Authority
• Tom Nightingale, North East stakeholder manager, Equinor
• Neil Spann, Chief executive, Power Roll
• Chi Onwurah, MP for Newcastle Central and chair of the all-party parliamentary group for diversity and inclusion in STEM
• John Duns (chair), Director, North East Times Magazine