POWERING PROGRESS

Exploring the socio-economic impacts of Keadby 2 Power Station October 2020 About this report In addition to its role in generating flexible and efficient power, the Keadby 2 project is delivering significant socio-economic benefits in the local area and across the UK.

From construction jobs, to support for the local supply chain, to charity donations, SSE Thermal and Siemens Energy are working with local people and organisations to ensure an enduring positive legacy from the project. This report looks at some of the socio-economic benefits that have been generated by the investment in Keadby 2, with economic contribution analysis undertaken by BiGGAR Economics. About SSE Thermal About Siemens Energy

SSE Thermal, part of the FTSE-listed SSE plc, is a Siemens Energy is one of the world’s leading energy CONTENTS leading developer, owner and operator of electricity technology companies. The company works with generation and energy storage assets. Its portfolio its customers and partners on energy systems for includes five of the most flexible and efficient the future, thus supporting the transition to a more gas-fired power stations across the UK and Ireland. sustainable world. With its portfolio of products, 03 Foreword solutions and services, Siemens Energy covers almost The business has a strategy to create value for the entire energy value chain – from power generation 04 Transition to net zero: the role of gas shareholders and society by developing, owning and transmission to storage. 05 Introducing Keadby 2 and operating low-carbon energy infrastructure in a sustainable way. Its vision is to become the leading The portfolio includes conventional and renewable 06 Investing locally and across the UK provider of flexible thermal energy in a net-zero world. energy technology, such as gas and steam turbines, As part of this ambition, it has a core focus on further generators and transformers, together with a portfolio 08 Contributing to local, regional and national economies decarbonising its energy generation through emerging to address the energy transition such as eletrolysers, carbon capture and hydrogen solutions. hydrogen-capable turbines and ‘Power-to-X’ 10 Supporting local supply chains technologies. More than 50% of the portfolio has 14 Looking after people on site SSE plc employs 12,000 people directly across the UK already been decarbonised. A majority stake in the and Ireland and is proud to be a real Living Wage and listed company Siemens Gamesa Renewable Energy 16 Keadby 2 in the community Fair Tax Mark accredited company. (SGRE) makes Siemens Energy a global market leader for renewable energies. An estimated one-sixth of the electricity generated worldwide is based on technologies from Siemens Energy. Siemens Energy employs 91,000 people worldwide in more than 90 countries and generated revenue of around €29 billion in fiscal year 2019. Siemens Energy is a registered trademark licensed by Siemens AG.

Exploring the socio-economic impacts of Keadby 2 Power Station SSE Thermal and Siemens Energy 01 FOREWORD

At SSE Thermal and Siemens Energy, we share a commitment to supporting the UK’s transition to a more sustainable energy system in a way that delivers a positive lasting legacy for the communities in which we live and work.

The Keadby 2 project brings to progress the project safely together SSE Thermal’s ambition and efficiently, while minimising to provide flexible and reliable disruption to the local area. We take energy in a net-zero world with our responsibilities seriously and we Siemens Energy’s ground-breaking want to continue to build on our gas turbine technology. As project strong relationship with the local partners, we set out to create the community to ensure the project cleanest and most efficient power delivers benefits that endure long station on the electricity grid. into the future.

With unparalleled efficiency, Through cutting edge infrastructure Keadby 2 will help the UK to move projects like Keadby 2, we believe away from older, more carbon North , and the wider intensive generation in the decades Humber region, can lead the way ahead. With the ability to reach in the transition to a cleaner energy full power in just 30 minutes, it future and help rejuvenate our will also provide vital flexibility economy in the process. to complement the increasing amount of renewable energy on We hope you find this report the system and maintain security valuable in demonstrating the of supply. socio-economic impacts of the Keadby 2 project. We look forward However, as responsible to completing the construction and developers, we are acutely aware continuing to deliver significant that the impact of a project of socio-economic benefits through this scale goes far beyond its role the delivery of this world class in power generation. From the energy generation asset. outset, we wanted to deliver a project that was best-in-class for Stephen Wheeler local engagement and community Managing impact. We are committed to Director, ensuring our investment in Keadby SSE Thermal 2 is felt within our neighboring communities, from creating high-quality jobs, supporting the regional supply chain, to providing Steve Scrimshaw donations to local charities. Vice President Siemens Energy We are proud of the efforts of UK&I our team, particularly through the coronavirus pandemic, to continue

02 Exploring the socio-economic impacts of Keadby 2 Power Station SSE Thermal and Siemens Energy 03 TRANSITION TO NET ZERO: INTRODUCING THE ROLE OF GAS KEADBY 2

The role of gas-fired generation will evolve as the energy system The UK’s most-efficient gas-fired decarbonises, but gas will still play a crucial role. As the volume of renewable power station generation on the system increases, other forms of generation will be required to respond to market changes and ensure security of supply. Keadby 2 is a new 893MW2 expected to become the cleanest gas-fired power station in North and most-efficient gas-fired power Providing flexible and models for carbon capture and Lincolnshire owned by SSE Thermal station in Europe. The power of and being constructed by Siemens the new Siemens Energy HL-class efficient power storage and hydrogen are welcome Energy, who will also provide turbine equals that of 1,400 developments. Analysis from National Grid long-term maintenance for the Porsche 911 Turbos. Just 21 of the What is carbon capture facility once operational. machines would roughly match the and the Committee on Climate and storage? power of a space shuttle at take-off Change shows a clear role for The project is located close to the Carbon capture and storage (CCS) - true rocket science! carbon-abated gas in all scenarios village of Keadby near . 1 is a technology that can capture they describe. Fundamentally, Construction of the project began Keadby 2 will also be capable at least 90% of the carbon dioxide this role is to support the mass in 2018 and is expected to be of being upgraded to further emissions produced from the expansion of renewable energy in completed in 2022. The site is decarbonise its generation through use of fossil fuels in electricity the UK by providing: located adjacent to the existing carbon capture or hydrogen generation and industrial processes, Keadby 1 Power Station, which technology, as routes to • a flexible and efficient energy preventing the carbon dioxide from Keadby 2 brings entered full commercial operation market develop. source when renewable energy entering the atmosphere. in 1996. first-of-a-kind, output is low; The CCS chain consists of three • system stability services to Keadby 2 brings first-of-a-kind, high-efficiency gas parts; capturing the carbon dioxide, support grid with high high-efficiency gas turbine transporting the carbon dioxide, turbine technology penetration of renewables; and, technology to the UK, and is and securely storing the carbon to the UK • improved system diversity and dioxide emissions underground, in security of supply. depleted oil and gas fields or deep saline aquifer formations. As we progress through the 2030s and 2040s, gas-fired What is hydrogen-fired generation will become a low generation? carbon electricity source in its Hydrogen can replace natural own right whilst providing a gas as the fuel for flexible thermal crucial role by supporting an power stations. As an energy vector electricity system underpinned that does not contain carbon, there with very large volumes are no carbon dioxide emissions at of renewable electricity, point of use. Instead, when burnt predominately from with oxygen, the by-product is offshore wind. water.

This starts with highly efficient gas- Both ‘blue’ and ‘green’ hydrogen fired generation, like Keadby 2, but can be used to generate low- there’s an imperative for the next 1. National Grid Future Energy Scenarios 2020, carbon electricity. Blue hydrogen Committee on Climate Change’s Net Zero projects to move to decarbonised is produced from natural gas with Technical Report, SSE Transition to Net Zero: technologies like post-combustion the role of gas. the resultant carbon emissions carbon capture and storage or captured and stored at this point. 2. Keadby 2 will have a Transmission Entry using hydrogen as a fuel. For this to Green hydrogen is created through Capacity of 893MW – the maximum amount of power it will be able to put on the system happen, routes to market need to the electrolysis of water. This at any one time. The turbine, manufactured by become available and government process uses renewable electricity Siemens Energy Ltd., is guaranteed to provide a minimum of 830MW power. commitment to develop business and is therefore carbon-free.

04 Exploring the socio-economic impacts of Keadby 2 Power Station SSE Thermal and Siemens Energy 05 INVESTING LOCALLY AND ACROSS THE UK

Keadby 2 is one of the largest infrastructure projects to be built in the region. The investment by SSE Thermal associated with the project, from development through construction and to the end of its operational life, is expected to total £1.2bn.

Analysis undertaken by BiGGAR Just under £330m is being invested the region, with the majority of this Economics3 showed that around by SSE Thermal4 to develop and spent in the local area. 77% of this £1.2bn is estimated construct Keadby 2, the majority to be spent in the UK, 45% will of which is spent with Siemens The top five industries invested in be spent in the region (Yorkshire Energy, the project’s principal as a result of SSE Thermal and and the Humber and the East contractor. Data provided by Siemens Energy’s UK investment Midlands) and 33% will be spent the two companies showed during the development and in the local area (Doncaster, East that almost half (£158m) of this construction of Keadby 2 are Riding of Yorkshire, Kingston upon investment has been, or is expected shown in the graph below. Hull, Lincolnshire, North East to be, secured in the UK. Just Lincolnshire, North Lincolnshire under 30% of the construction and Nottinghamshire). cost is expected to be secured in

Construction £69m

Manufacturing £55m

Administrative and support service activities £11m

Professional, scientific and technical activities £6m

Real estate activities £4m Source: BiGGAR Economics £- £20m £40m £60m £80m analysis

Local area Region UK

3. The full report is available to download at Whilst a significant amount of money is being spent on Keadby 2’s sse.com/sustainability/reporting. construction, the majority of total project spend for Keadby 2 will happen during its operational life. It is estimated that just under £920m will be 4. This excludes risk/contingency. Including this budgeted expenditure would take the spent on the operation of Keadby 2 up to the end of financial year 2046. total investment in development and with an estimated 87% of this expenditure spent in the UK, 51% spent construction to £344m. £305m was spent by the end of August 2020. within the region, and 37% spent within the local area.

06 Exploring the socio-economic impacts of Keadby 2 Power Station SSE Thermal and Siemens Energy 07 CONTRIBUTING TO KEADBY 2 POWER STATION’S LOCAL, REGIONAL ECONOMIC CONTRIBUTION AND NATIONAL ECONOMIES

Through its development, construction and operation, Keadby 2 has Lifetime UK economic generated and will continue to generate substantial local, regional and contribution: £1,035m national economic benefits. These benefits are driven in part by efforts made by SSE Thermal and Siemens Energy to support a domestic supply chain over Development and construction: the project’s lifetime. £175m and 2,900 years of employment Operation and maintenance: £36m per year and 550 jobs annually Undertaking Lifetime regional economic socio-economic analysis Over £1bn contribution: £494m To understand the scale of this Keadby 2’s expected contribution to the UK economy economic contribution, SSE Development and construction: Thermal and Siemens Energy over its lifetime. £76m and 1,170 years of employment commissioned BiGGAR Economics Operation and maintenance: to calculate the economic impact £17m per year and 290 jobs annually of the project. The full technical During the development and economy, defined as Yorkshire and report is available to download construction of Keadby 2, the the Humber and the East Midlands, Lifetime local economic on ssethermal.com/keadby2 analysis showed that £51m is with 1,170 years of employment contribution: £361m and www.siemens-energy.com/ expected to be contributed to the supported. Over the operational keadby2 local economy, with 790 years of phase, it was estimated that £17m Development and construction: employment supported. Over the will be added to the regional £51m and 790 years of employment Investment in Keadby 2 drives operational phase, it was estimated economy each year, with a total of Operation and maintenance: economic activity through the that £13m will be added to the local 290 jobs supported on an annual £13m per year and 220 jobs annually value it adds to the economy economy each year, with a total of basis. This means that over Keadby (referred to as Gross Value 220 jobs supported on an annual 2’s lifetime, £494m is expected to Added or GVA) and the years basis. This means that over Keadby be added to the regional economy. of employment it supports. To 2’s lifetime, £361m is expected to UK fully capture the impacts of be added to the local economy. UK benefits this spending, the economic Regional area contribution results detailed below These results include the local At a UK level, the analysis by Local area include activity further down the people employed on site, with jobs BiGGAR Economics showed that supply chain (indirect impacts) ranging from providing technical £175m was contributed to the and activity that results from the expertise and labour to delivering UK economy, with 2,900 years of spending of salaries (induced catering facilities, as well as the employment supported as a result impacts), as well as direct impacts. wider impact of the spending of investment in the project during of employee wages in local development and construction. Local benefits restaurants, hotels, petrol stations Over the operational phase, it was and shops. estimated that £36m will be added BiGGAR Economics analysed the Note: to the UK economy each year, with contribution made by Keadby Regional benefits Totals may not sum due to rounding. 2 in the local area (defined as a total of 550 jobs supported on an Operation and maintenance contribution is the total undiscounted economic Doncaster, East Riding of Yorkshire, During development and annual basis. This means that over impact of operational expenditure. Local Kingston upon Hull, Lincolnshire, construction, BiGGAR Economics Keadby 2’s lifetime, £1,035m contribution is included in total regional contribution and regional contribution , North estimated that £76m would is expected to be added to the is included in total UK contribution. Lincolnshire and Nottinghamshire). be contributed to the regional UK economy.

08 Exploring the socio-economic impacts of Keadby 2 Power Station SSE Thermal and Siemens Energy 09 SUPPORTING LOCAL The Keadby 2 project team hosted a local ‘Meet the Buyer’ SUPPLY CHAINS event in December 2018, prior to the commencement of the main construction works. Over Both SSE Thermal and Siemens Energy are 75 local businesses attended the committed to maximising the use of local event, held at the DoubleTree companies wherever possible. The case studies Forest Pines Hotel near Scunthorpe, which gave each on the following pages showcase some examples company the opportunity to of local businesses which have benefited from pitch their goods and services the project. to a member of the Siemens Energy procurement team. CASE STUDY: COMPLETE WEED CONTROL

As a locally based company, Complete Weed Control provides a range of CASE STUDY: ground maintenance services to the South and East Yorkshire and North and CGB HUMBERTHERM South Lincolnshire areas. Keadby 2 has been able to secure specialist Following its attendance at the vegetation clearance as required. Keadby 1 station, securing business project’s Meet the Buyer event, Peter Lindley, Group Manager for on the Keadby 2 construction expertise from within the local area during the the company secured an ongoing Complete Weed Control, said: project has been a real positive construction of the power plant. contract with the Keadby 2 project “Having worked with SSE Thermal for us, giving us the opportunity providing winter gritting services for a number of years, providing to provide local operatives with CGB Humbertherm is a specialist as a result has been able to The retention rate for their along with weed control and services to the operational ongoing employment.” thermal insulation company that demonstrate to SSE Thermal the apprentices is higher than most was formed in 1974 and is based expertise that is available locally. other trades and the majority of in , 20 miles away As a result, CGB Humbertherm their current employees originally from Keadby 2. Its main areas of secured work worth approximately started off in the company as expertise are the design, supply £2m for the installation of thermal apprentices. CGB Humbertherm and installation of all types of insulation at the new Keadby 2 currently employs three insulation for use on power power plant. This is a significant apprentices. generation plants. contract for the local company and is equivalent to a third of its annual The relationship and experience The number of people that CGB turnover. that CGB Humbertherm has Humbertherm employs will vary developed from its work on Keadby depending on the level of work The long-term relationship with 2 has also enabled it to win work it has, but typically it will directly Keadby 1 and the significant with Siemens Energy further employ between 60 and 70 contract awarded by Keadby 2 afield. This has included outage people who live within a 35km provides the stability that CGB maintenance contracts for existing radius. This will include thermal Humbertherm needs to develop power plants in the UK and Ireland. insulation operatives, sheet its workforce. The installation of Prior to this, Siemens Energy had metal workers, labourers and thermal insulation is a skilled trade typically imported expertise in apprentices. and the operatives will do a power station thermal insulation. four-year apprenticeship. The CGB Humbertherm has worked company employs young people for years on the neighbouring from the area and offers them the Keadby 1 power plant and ability to train, earn and progress.

10 Exploring the socio-economic impacts of Keadby 2 Power Station SSE Thermal and Siemens Energy 11 CASE STUDY: CLS ENGINEERING

Local contractors have built on their relationship with SSE Thermal and Siemens Energy at Keadby 2 to secure projects further afield.

CLS Engineering is a civil contractor was a strong match for CLS based in , Lincolnshire that Engineering’s core activities and specialises in demolition and included demolition activity and construction work. It is a family site clearance, where a coal-fired company that was established in power plant had previously existed, 1972 and has completed over 1,300 as well as the relocation of the civil engineering and demolition contractor’s village and fencing. projects. These contracts directly supported CLS Engineering was awarded two the employment of over 75 people, contracts for the Keadby 2 power including 60 employees of CLS plant, with a combined value of Engineering and 15 subcontractors £5.7m. These were important who worked on the site. This was contracts for the company and a local workforce, and 90% live was equivalent to half of its within a 50km radius of the site annual turnover. The scope of at Keadby 2. The jobs that were works required for these projects supported included: CLS Engineering • site manager and foreman; • plant operatives; was awarded two • skilled labourers; and contracts for the • operatives

Keadby 2 power This was the first direct contract plant, with a CLS Engineering had with Siemens Energy. CLS Engineering impressed combined value Siemens Energy with their of £5.7m. approach to the work and the skillset of their employees. CLS Engineering have used the skills and experience from the Keadby 2 work to secure further contracts with Siemens Energy, including enabling works in South Wales and groundworks for a substation extension to facilitate the expansion to the combined installed capacity of Keadby 1 and Keadby 2.

12 Exploring the socio-economic impacts of Keadby 2 Power Station SSE Thermal and Siemens Energy 13 LOOKING AFTER PEOPLE ON SITE

Construction of Keadby 2 commenced in August 2018 and since then the team have inducted over 3,400 people on to the project site.

SSE Thermal Everyone on site is empowered a dedicated Health and Safety Well Man Clinics were introduced Monthly wellbeing initiatives key issue e.g. prostate cancer with the message: ‘If it’s not safe, Steering Group at the outset of the early in the project, providing a awareness, drink driving and and Siemens we don’t do it’. Keadby 2 project. free-to-access service for general Alongside the essential services suicide prevention. medical checks such as testing for and Well Man Clinics, MediWright Energy share a SSE Thermal and Siemens Energy The group, which is attended by cholesterol, blood pressure and promotes a topical health and commitment share a commitment to prioritising senior management from both BMI, as well as as a listening ear wellbeing initiative each month the wellbeing of everyone on the companies, meets regularly to to anyone that may need extra to raise awareness and engage to prioritising site, which has enabled the team to discuss performance at the site and support or signposting. everyone on the site about a build a first-class health and safety the wellbeing of look at new ways of working to culture. foster a positive culture. everyone on the A number of strict processes management teams have worked The Magnificent 7 Responding to COVID-19 were put in place, including social closely with Industrial Relations site, which has Best-in-class facilities There is no doubt that the Safety is a topic that involves distancing, increased hygiene and Trade Unions to ensure biggest challenge of 2020 came enabled the team everyone on site and creating an Up to 800 people are expected measures and deep cleaning that any necessary additional in the form of the coronavirus to build a first-class inclusive culture is something that on site per day during peak regimes, as well as reducing measures were implemented. pandemic. The site’s first class facilities has been important from day one construction so providing industry- numbers at site where possible. health and At Keadby 2, the number one manager and cleaning team have of the project. Monthly site audit leading facilities has been key to As with any new guidance and scores are awarded to teams based priority from the beginning of played a key role in making sure safety culture. the project’s success. changes, the success of the the crisis was the wellbeing of that communal facilities were on 7 Key Safety Principles, with the measures could not havebeen team scoring highest each taking everyone working on site and cleaned and maintained to a Each individual has access to achieved without the co-operation home a prize. their loved ones. high standard. Introducing a shift the project’s dedicated team of of everyone at the site. Immediate action was taken pattern and staggered start and Health and Safety full-time site medics, provided by Tony Duckitt, a site-based GMB finish times has meant workers MediWright. This service not only to make changes throughout Steering Group the site’s construction, welfare Union Representative, said: have been able to achieve social covers the essentials, such as first and office areas in line with the “As a site, our response to the distancing while still working to Senior leaders from SSE Thermal aid and emergency rescue, but also evolving guidelines issued by the COVID-19 pandemic has been deliver the project.” and Siemens Energy established a host of additional facilities. UK Government, HSE and UK robust and reassuring for the Construction Leadership Council. workforce. The HSE and

Over 3,400 people inducted at site

SSE has been a leading Living Wage accredited employer since 2013. This means that everyone who works directly for SSE or regularly on its 1,204,488 safe hours worked behalf, including at Keadby 2, is paid at least the real Living Wage as set by the Living Wage Foundation. Over 99% safe days

14 Exploring the socio-economic impacts of Keadby 2 Power Station SSE Thermal and Siemens Energy 15 KEADBY 2 IN THE COMMUNITY

Working together to create a positive culture throughout the project has been a key focus for both the SSE Thermal and Siemens Energy teams.

CASE STUDY: ENCOURAGING NEXT GENERATION ENGINEERS

Keadby with Primary School – Greenpower Project

During 2019, the Keadby 2 team and Tim the children who are good working relationships with was approached with a request for used to being involved in these the children. They allow the funding and support by Keadby types of activities are still learning children to have a go at something with Althorpe Primary School, and developing their own skills, and when the children have which is local to the site. broadening their mechanical difficulties, they encourage them to As part of ongoing engagement, The Keadby 2 charitable donations local charity. The donation is linked knowledge of how to work think about why something went members of the team regularly scheme, introduced in 2018, to the site’s safety performance The team were delighted to provide effectively with tools and put wrong or how they could approach attend careers events at local provides an opportunity for a and efforts are made to encourage £1,000 towards the purchase of a different components together. a task differently rather than just schools and colleges. monthly donation of £1,000 to a members of the site team to ‘KIT’ car so that the school could Both Chris and Tim have developed showing them how it is done.” nominate a local charity. join the Greenpower Project.

To date over £20,000 has been Project engineers Christopher awarded locally, including to: Whitely and Tim Simpson also volunteered their time each week • Lions to help out with the after-school • Lincolnshire Air Ambulance Greenpower Club. • Lindsey Lodge Hospice Scunthorpe Mrs Appleyard from Keadby with • Crowle Primary Academy Althorpe Primary who leads the after school Greenpower Club, said: • Crowle Regeneration Group • Disney Ward at Scunthorpe “Throughout this build the children General Hospital are having to work together as • Keadby with Althorpe a team, sharing out jobs and Primary School responsibilities as well as learning • Epworth School Playgroup from each other. Thanks to Chris

16 Exploring the socio-economic impacts of Keadby 2 Power Station SSE Thermal and Siemens Energy 17 Designed and produced by Work Creative | Doncaster www.workcreative.co.uk sse.com siemens-energy.com

Published in October 2020