In today’s UK construction news, we will look into the first gas-fired power station in the world to incorporate carbon capture and storage technology may now commence construction. This will be the first of its kind. In the meantime, the country’s high-speed track infrastructure will be planned and constructed by the Ferrovial BAM joint venture over the duration of the 140 miles that make up HS2. In addition, construction companies stated that the market for housebuilding is being impacted by the high interest rates on loans and the poor level of consumer confidence.
Launch of £4bn Net Zero Teesside Power
Original Source: Lift off for £4bn Net Zero Teesside Power scheme
Construction may now begin on the first gas-fired power station in the world to use carbon capture and storage technology.
The BP-Equinor joint venture, Net Zero Teesside (NZT) Power, has inked contracts with its suppliers totalling £4 billion and achieved financial close.
Construction is expected to begin in mid-2025 by NZT Power, with start-up scheduled for 2028.
In the East Coast Cluster, there are three initial carbon capture projects on Teesside, and this project will work in conjunction with the Northern Endurance Partnership’s (NEP) CO2 transportation and storage infrastructure, which is currently in its execution phase.
When fully operational, the combined cycle gas turbine power station has the potential to generate 742 MW of low-carbon electricity, which is enough to meet the yearly electricity needs of over one million homes in the United Kingdom.
Using infrastructure supplied by NEP, the plant will be able to absorb up to two million tonnes of carbon dioxide annually, which will subsequently be transferred to secure subsea storage sites beneath the North Sea.
The aggregate value of the eight contract packages worth around £4 billion will be used by nine engineering, procurement and construction (EPC) companies to finish the building work on the two projects.
These are the individuals hired as contractors:
- Technical partnership between Technip Energies and GE Vernova for onshore power generation, collection, and compression; construction partner Balfour Beatty; technology licensor Shell
- The following pipe-mills have been nominated: Equans, Liberty Steel Hartlepool, and Corinth Pipeworks; Marubeni-Itochu Tubulars Europe; Costain Linepipe; and onshore and offshore
- The water outfall, onshore outlet facilities, landfalls, and offshore pipelineSaipem is a
- Technical Marine Contractors’ Offshore Subsea Injection System
- Alcatel Submarine Networks’ power and communication cables
- A brief history of offshore systems engineering
- Wood-Representing Integrated Project Management Team
- More than 3,000 construction jobs might be created and supported by NZT Power, with an additional 1,000 employment generated during operations.
“Net Zero Teesside is a transformational project, underpinning the UK’s transition to cleaner and greener energy consumption and driving regional economic growth in Northeast England,” said Leo Quinn, chief executive of Balfour Beatty. By combining our respective strengths with those of Technip Energies—a global leader in engineering and technology integration—, Shell—with its cutting-edge Cansolv CO2 Capture technology—and GE Vernova—with its unrivalled power generation expertise—we are bringing this ambitious plan one step closer to fruition with today’s announcement.
“As a UK headquartered company, continuing to support a world-leading decarbonisation project in our own backyard is monumental,” stated Craig Shanaghey, executive president of projects at Wood. Leading the energy transformation, our integrated team is building and advancing the energy ecosystem in close collaboration with Net Zero Teesside Power and Northern Endurance Partnership.
Even though the plans had been developed and authorised by a previous administration, Prime Minister Keir Starmer attempted to claim credit for everything. Our industrial heartlands have been stifled by 14 years of stagnation and turmoil for much too long. Workers should be treated better. By prioritising growth and investing in future industries, today’s investment demonstrates that this administration is taking a different approach.
It was more appropriately stated by Ian Hunter, managing director of Net Zero Teesside Power: “Today’s announcement is the culmination of years of work to make Net Zero Teesside Power a reality.”
According to Equinor’s UK country manager Alex Grant, the UK is an important market for the energy provider. He mentioned that Equinor has a track record of meeting the East Coast’s energy needs, shifting demand away from fossil fuels and towards renewables and low-carbon alternatives like hydrogen and carbon capture and storage. Equinor and the United Kingdom have taken a giant leap forward with this project, which will decarbonise the country’s industrial cores, bring it closer to its net zero goals, and create opportunities in the supply chain all while creating jobs. Our company is excited to continue collaborating with the incoming administration on low-carbon initiatives around the United Kingdom.
Ferrovial Wins Biggest UK Construction Contract for High-speed Rail
Original Source: Ferrovial secures largest UK construction contract in its history with high-speed rail project
Over the course of HS2’s 140 miles, the Ferrovial BAM joint venture will plan and construct the country’s high-speed track infrastructure.
About 280 miles of track will be designed and installed as part of the contract.
Three contracts for the design and construction of the track infrastructure for the high-speed railway project HS2 in the UK have been awarded to Ferrovial through its Construction division and a joint venture with BAM. In November, HS2 Ltd. announced a series of rail systems contracts, totalling roughly £3 billion, with the Track systems contracts to be given to Ferrovial BAM as one component. Once contracts are signed, Ferrovial BAM will confirm the actual value of the work to be delivered. The fourteen-year partnership between Ferrovial and BAM continues with this latest award, which expands their portfolio of vital infrastructure projects.
Since entering the UK market more than 20 years ago, Ferrovial’s UK Construction company has landed the largest schemes.
The joint venture between Ferrovial and BAM will see the delivery of three segments, spanning 140 miles, of the high-speed route from Old Oak Common to Birmingham Curzon Street station. Under the terms of the agreement, 280 miles of track with a maximum speed of 225 mph (360 km/h) will be planned and built. Additionally, the joint venture will manage logistics, provide support during testing and commissioning, and serve as the lead contractor for activities associated to the track.
Along with other contracts awarded to contractors for Overhead Catenary Systems (OCS), Third Party Telecommunications, Operational Telecommunications and Security Systems (OTSS), Command, Control, Signalling and Traffic Management (CCS&TM), and Engineering Management System, HS2 confirmed this project award last week (26 Nov ’24).
The combined value of these contracts is almost £3 billion, and they will likely generate employment opportunities for tens of thousands of people in the United Kingdom. Now that primary works contracts are nearing completion, the first design phase can begin at the same time. This way, when the civil works are finished, the squad will be prepared to mobilise.
Contracts are about to be signed, signalling the start of a new phase for HS2 and UK high-speed rail, as the obligatory 10-day standstill period has concluded.
Joint venture partnerships between Ferrovial and BAM have a track record of timely and under budget delivery of vital infrastructure projects for the United Kingdom. Together, starting in 2010 as BFK, they executed three Crossrail projects, including the lengthiest section of digging works between Royal Oak and Farringdon and the first central station on the Elizabeth Line, Farringdon Station. The team has been consistently delivering high-quality work throughout the entirety of the HS2 project, including the Silvertown Tunnel in East London and the Enabling Works packages for Fusion JV and the central Main Works Contract for EKFB, and is now delivering the track infrastructure for the entire HS2 trace.
The group will handle interface management and conflict resolution within the framework of the Rail Systems Alliance, an alliance of collaborative organisations. To meet their mutual time and budgetary objectives, the team will collaborate on all aspects of the project, including design, access, resources, and logistics.
The Construction division of Ferrovial has completed the construction of 1,125 km of high-speed rail in the United States, the United Kingdom, and Spain. The Spanish high-speed rail network is the second-longest in the world, and the firm is responsible for its construction (12%), delivery (26% of the track), and maintenance (45%). When it comes to improvements in track assembly, the corporation has 26 patents.
UK Development Rises but Housebuilding Falls, Threatening Government Goals
Original Source: UK construction grows but housebuilding decline threatens government targets
High borrowing rates and low consumer confidence are affecting the market for housebuilding, according to construction businesses.
Construction activity in Britain’s building industry increased in November, but homebuilding slowed, casting doubt on the government’s new houses ambitions.
Following an increase from 54.3 in October, the S&P Global/CIPS UK Purchasing Managers’ Index for the construction industry registered 55.2 last month.
The industry’s vulnerability to interest rates and consumer sentiment is highlighted by the fact that strong demand for civil engineering and commercial projects more than made up for the decline in residential housebuilding.
Construction companies said high financing costs and low consumer confidence had hurt demand, leading to a precipitous decrease in housebuilding activity, which reached its steepest pace since June, with a reading of 47.9. A sector is considered to be expanding if the reading is more than 50, and contracting otherwise. There was the greatest increase in commercial construction activity since May 2022.
In December, for just the second time since 2020, the Bank of England lowered interest rates; this month, they are likely to remain unchanged. The likelihood of gradual rate reduction in the future was reaffirmed by Governor Andrew Bailey on Wednesday.
If the Labour Party does not implement more extensive changes to the planning system, it will fail to meet its election promise of constructing 1.5 million homes in England by the end of this parliament, which equates to 300,000 homes each year.
Although the construction industry escaped the UK economic slump, new orders were affected by the still-high cost of borrowing, according to Tim Moore, economics director at S&P Global Market Intelligence.
The confidence level of construction enterprises is at its lowest point since October 2023, reflecting a general decline in optimism for the next 12 months.
Job creation was weaker and company optimism fell across the construction sector as a whole due to “a loss of momentum for new work, alongside concerns about rising employment costs,” according to Moore.
While the employment indicator in the poll did see a little increase, the rate of job creation hit a three-month low.
Companies have stated that they are unable to hire more people due to the rising cost of employment. To assist keep prices down, some companies reportedly brought in subcontractors.
Summary of today’s construction news
Overall, we discussed the Net Zero Teesside (NZT) Power, a joint venture between BP and Equinor, has reached financial close and signed £4 billion worth of contracts with its suppliers. Midway through 2025, NZT Power plans to begin construction, with start-up set for 2028. At the same time, the contract calls for the design and installation of approximately 280 kilometres of track. Through its Construction division and a joint venture with BAM, Ferrovial has been awarded three contracts to design and construct the track infrastructure for the high-speed railway project HS2 in the UK. The government’s new homes plans are in jeopardy because although construction activity in the UK’s building industry rose in November, homebuilding slowed. Next month, the S&P Global/CIPS UK Purchasing Managers’ Index for the construction industry was 55.2, following an increase from 54.3 in October.
