Steel power upgrade hit by cash delay
TATA’S power station upgrade at its huge Port Talbot steelworks has been put on the back burner as it is still awaiting an injection of Welsh Government cash, according to a leaked report.
A £30m commitment had been pledged in the Cardiff Bay administration budget last year in a drive to make the works more energy efficient and reduce carbon emissions.
The Welsh Government money will help cover the cost of 45% of the project, with Tata investing 55% of the cost. It was expected the work would be carried out over four separate phases over three years.
But in a leaked Tata Steel report revealed to Wales Online it appears none of the Welsh Government cash has been made available, which has led to the hold-up of phase two of the project.
“Tata Steel is continuing its discussions with the Welsh Government on its Heads of Terms for the grant funding,” said the report.
“Until an agreement on terms has been reached and the support package signed off by ministers, Tata Steel is unable to draw down funding.
“Tata Steel has nonetheless completed Phase One of the power plant improvements in anticipation of Welsh Government support, but we are not able to start Phase Two of the scheme until a final agreement with Welsh Government is in place and we draw down funds.”
In response, and in a joint statement, Tata and the Welsh Government said they were working closely on a final agreement which would be confirmed in the near future.
It has been claimed by a number of political sources that the decision to hold back from investing in Tata Steel has been delayed until the new First Minister is selected and is in post at the Senedd, but that has been rejected by the Welsh Government.
The investment will aim to reduce the amount of unplanned outages on site and allow the firm to use the processed gas for energy regeneration, reducing the need to import energy from the grid.
Under phase one, a revamp of existing assets has been carried out, along with an overhaul of high-pressure boilers and turbines and other systems.
The delayed phase two will see three of the oldest turbines on site replaced with a new turbine of 35MWe capacity when it has the funding to go ahead – the new turbines will have an availability of 98% compared to 85% of those currently in place.
A new water treatment plant has been proposed under phase three, as the one currently in place is more than 40 years old and is said to be in a poor condition.
The report underlines that it fails to meet its design parameters for either quality or quantity of water production and the new state-of-the-art facility will have a 25-year shelf life.
Two of the oldest boilers will be removed from the site under phase four, and a new 140MWth-capacity boiler installed.
The deal formed part of a package of support between Tata and the Welsh Government made at the height of the steel crisis last year, and was at the heart of a key package of measures made to the workforce before it voted on pensions and other changes.
Bethan Sayed, Plaid Cymru member for South Wales West, said: “Last year, Plaid Cymru secured investment support for the power station at Tata Port Talbot, as part of an agreement with Labour. It seems that Tata Steel has not yet had that money.
“I’ve been told that Tata are eager to progress with the next phase but need that money released.
“At the very least, we need clarification on the Welsh Government’s position relating to this.”
A Welsh Government spokesman said: “It is complete nonsense to suggest we are delaying this announcement for a new First Minister.”