Major energy projects set to generate new work contracts

The government’s recent commitment to support the construction of a generation of new gas power stations to secure the country’s electricity supply has highlighted the strong prospects for new work from the energy sector.

Work on new gas power stations will reinforce the improving medium-term outlook in the civil engineering sector where – thanks partly to rising investment in electricity generation and distribution – Glenigan is forecasting a 17% rise in the value of new starts this year.

It also comes as the major publicly-quoted contractors highlight the UK energy sector as one of their most promising markets for winning new orders this year.

Under the government’s plans to boost generating capacity, new gas plants are to be built ‘net-zero ready’ and able to convert to alternatives such as carbon capture and hydrogen in the future. The new gas power plants will run less often, as renewables expand.

Glenigan data shows there are already some significant new gas projects in the pipeline. Work on what will be one of the world’s first commercial scale gas-fired power stations with carbon capture, the £450 million Net Zero Teeside Project, is set to start later this year following the recent appointment of Costain and Balfour Beatty as key contractors on the scheme.

Aecom and Mott Macdonald are among the consultants on the new power station at Stockton-on Tees which will be built over two years across a 52 hectare site and which has been deemed a nationally significant infrastructure project (Project ID: 19064235).

Other significant energy projects are also keeping the big contractors busy. Costain recently said it had an “excellent pipeline of opportunities” which were driving high levels of tendering activity and with energy seen as a sector where it expected significant growth over the next few years. The group’s strategic focus in the sector is on energy transition (hydrogen and carbon capture), resilience and connectivity.

Balfour Beatty also recently pointed to UK energy as one of the sectors – along with transport and defence – where opportunities were set to drive growth in 2025 and beyond and which supported its positive long-term outlook.

Unveiling its financial results, Balfour Beatty said that both the Conservative and Labour parties are putting a priority on clean and domestically generated energy. It noted that a: “…steep growth in the volume of UK power transmission and distribution projects will begin in 2025, with an acceleration of work to strengthen and stabilise the power networks, while nuclear, wind, carbon capture and hydrogen projects continue to develop.”

Nuclear construction opportunities which the company highlights include Sizewell C, where the government has recently made an extra £1.3 billion available for preparatory works and the small nuclear reactors which the government is progressing.

Glenigan data highlights other major alternative energy projects in the pipeline. They include the £1 billion Thurrock Flexible Generation Plant in Tilbury where a contractor has been appointed – as yet unnamed – and work is due to start this spring. The scheme involves the construction and operation of gas reciprocating engines with significant electrical and battery storage capacity (Project ID: 05483324).

Meanwhile work is set to start towards the end of this year on the £201.7 million West Burton C Power Station near Retford in Nottingham. This will be a gas-fired peaking plant designed to meet National Grid demands for short blasts of power when demand is high or renewables fall short. Work on the scheme, which is at the pre-tender stage, is set to run for 24 months (Project ID: 17241225).