By Bruce Fegen

A FIFE paper-making firm could close with the loss of more than 500 jobs unless the legislation regarding connections to Britain’s National Grid is changed.

Tullis Russell has been told that a planned £110 million green power plant at the Markinch mill in conjunction with Scottish Biopower cannot be connected to the grid until 2014.

With the company being forced to shut down its coal-fired boilers by 2010 to comply with SEPA emission standards, and uncertainty over the future of gas supplies, managing director Chris Parr said the viability of Tullis Russell is at stake.

Mr Parr warned, “This is not scare-mongering. The future of this company is under threat unless things change.”

The biomass plant at Tullis Russell would produce 50 megawatts of “green” power by burning wood and willow. The company requires around 20 megawatts, leaving 30 to be exported to the National Grid, which is vital to make the project viable.

However rules applied by gas and electricity regulator Ofgem mean that applications for connection to the network are dealt with in date order.

With renewable energy projects totalling 16 giga-watts waiting to be connected, the Fife firm finds itself way down the list.

Mr Parr explained, “This project alone will deliver 20% of Scotland’s target reduction in carbon dioxide emissions and contribute 6% of the renewable energy generation target. A lot of the schemes ahead of us in the queue for things such as wind and wave power do not even have planning permission or funding in place.

“They are ‘wish list’ schemes and the viability of many is untested at best. Our scheme … ticks every environmental box and would safeguard jobs here, but the one stumbling block is the legislation.”

At present the company’s energy needs are met from around 100,000 tons of coal and 8.5 million therms of gas a year.

A few years ago, going over entirely to gas would have been an option. However a huge price rise—from around 15p a therm paid by Tullis Russell three years ago to £1.70 a therm in December and now around 80p—as well as uncertainty over supplies from Caspian states have effectively ruled this out.

Mr Parr praised the efforts of Central Fife MSP Christine May, local MP John MacDougall and his researcher Scott Brady in trying to resolve the issue and concluded, “There seems to be no logic or sense behind this, it’s the typical British response of forming an orderly queue.

“Scottish Biopower and ourselves are pulling our hair out, but it appears Ofgem’s hands are tied.

“Make no mistake, this is very serious and it could threaten the future of Tullis Russell.”

Mr MacDougall said the entire future of the paper-making industry, which has existed in the area for close on 200 years, is at stake.

“As a country, we must waken up to the fact that we are trying to avoid an invisible crisis in which the public may only realise how serious the situation is once the lights go out.

“I am delighted that the Government has recognised this and set up an energy review to look at how we can bridge the energy gap.”

The MP continued, “I firmly believe we should be looking at a mix of energy options in order to ensure we are not held hostage by suppliers in other countries. Of special interest to me are the renewable options being developed … particularly in Fife.

“This week, I have made representations at the highest level of government on behalf of Tullis Russell.

“I met the energy minister Malcolm Wicks; spoke with the director for energy within the DTI; raised the question of local renewable projects at the Scottish Oil and Gas Group; and spoke in Scottish questions.

“I even raised the matter of access to the National Grid at a charity Burns supper I organised with Raytheon, one of our largest local employers, at Westminster.

“There is a great deal of sympathy for our case and I will continue to exert pressure on the relevant Government bodies. Influencing the Energy Review will be critical.”

Mr MacDougall, who is continuing to work with Christine May to influence SEPA, added, “I have persuaded the Scottish affairs committee to meet in this constituency in March to take evidence about renewables projects.

“I know Chris Parr will seize this opportunity.”