Carlton Power misses capacity market deadline, gives up Trafford contract

0

js42338623-e1467795732610-150x150

The developer behind the proposed 1.9GW new gas plant at Trafford has given up its capacity market contract as it struggles to secure backers.

Carlton Power told government it was unable to meet a deadline extension for the financial commitment milestone (one of the rules in the capacity market) and was not certain of its ability to deliver its contracted power.

The contract is worth around £30m a year. Carlton Power had been given a three month extension on its original September deadline by then energy secretary, Amber Rudd, last July.

That deadline passed yesterday (19 December) and the company today issued the following statement:

“This decision has been taken with regret but we understand that the Government needs to have a clear picture of what generation capacity is going to be physically available in the future and we did not have sufficient certainty that our Trafford combined-cycle gas turbine project (1.93GW CCGT) would be completed in the time required.

“Since securing the Capacity Market agreements in December 2014, we  have invested significant resources to complete the development of Trafford with our chosen EPC Contractor GE and we had reached the stage that we would be ready to start Trafford’s construction in January 2017 which would deliver much needed low-cost electricity in early 2020.

“The economics of the Trafford project are expected to provide returns of close to 16% and we have had detailed discussions with a wide range of UK and international investors over the past two years to seek the required capital funding.  Investors have consistently commended the Trafford project in terms of construction readiness and technical capability; however it is clear that they remain very concerned about the uncertainty of merchant revenues for new CCGT projects.

“It has been acknowledged by the Government and others that new high-efficiency CCGT plant are essential for the UK market in order to achieve the aims of security of energy supply and low cost of energy with the smallest possible environmental impact.  However it has become increasingly apparent that the current arrangements for supporting the development of new generation capacity do not give sufficient comfort for this to be brought forward without substantial and unacceptable risk to investors.

“Despite this decision, we  will continue to pursue our development of Trafford and our power project at Thorpe Marsh (near Doncaster) and we look forward to discussing with BEIS ways in which much needed overseas investment can be encouraged to participate in this essential regeneration of reliable, low cost GGCT capacity.”

Related stories:

Free 2016 demand-side response report

Capacity market remains too low for large new gas

Carlton Power receives capacity market termination notice

Triad, capacity market, CfD, RO: Prepare for higher bills warns SmartestEnergy

Energy brokers and TPIs warn early capacity market could add 5% to power bills

Is Triad past its peak?

Ofgem embedded benefits update adds to uncertainty ahead of capacity market

Firms ill prepared for ‘huge’ capacity costs on energy bills

Government moves to change capacity market rules

BEIS tightens capacity market rules in bid to build large power stations

Defra outlines emission control plan ahead of capacity auction

EDF tables changes to stop small generators driving down capacity market prices

Ofgem moots swift cap and cuts to revenues for small generators

Doubling of capacity market price unlikely to build new gas

Hitting small generators ‘will not get new gas plant built’

Major changes to capacity market and distributed generation charging regime proposed

Energy brokers and TPIs warn early capacity market could add 5% to power bills

Engie CEO: The revolution will not be centralised

Nissan turns on 4.75MW solar plant, eyes battery storage market

Somerset site to install ‘grid scale’ Tesla battery unit

Battery storage: Positive outlook or does a correction loom?

Tesla: People don’t engage with energy bills, but they will have to

Decc, Ofgem and National Grid must make battery storage stack-up

National Grid must provide a plan for battery market, says SmartestEnergy

Ofgem: Energy flexibility will become more valuable than energy efficiency

Infrastructure chief: UK could be energy storage world leader if government acts now 

National Grid boss: future of energy is demand not supply

Government backs Adonis’ smartgrid plan, pledges £50m+ for storage and demand response

National Grid says impact of solar requires greater system flexibility

Eon opens 2MW battery storage facility

Centrica’s ENER-G: Flexibility and grid services will drive future revenue for CHP

Centrica buys ENER-G’s CHP business in bid to pivot business model

Fear of disruption hobbling demand response, says survey of 200 UK firms

More than half of I&C firms mulling energy storage investment

Biomass, heatpumps and CHP top firms’ heat investment priorities

CHP behind 6% of UK electricity, could do more

Firms with CHP generators could be paid to stop exporting power

Renewable heat subsidy schemes ‘wasting money’ by ruling out waste heat

National Grid boss: future of energy is demand not supply

Free report: Financing energy efficiency

Free report: 2016 business energy risks

Free report: The heat report 2016

Click here to see if you qualify for a free subscription to the print magazine, or to renew.

Follow us at @EnergystMedia. For regular bulletins, sign up for the free newsletter.

LEAVE A REPLY

Please enter your comment!
Please enter your name here