Capacity margins for winter 2016 could become tighter still as Eggborough Power announced that its 2GW coal-fired power station could cease generating next March.
The company said low power prices, changes to the capacity mechanism, biomass subsidies and National Grid’s strategic balancing reserve programme, plus the impact of the carbon price lay behind its decision to consult staff over closure.
The operator said the 53 year old plant needed £200 million in funding over the next three years. It said carbon tax payments would amount to £250 million over that period. In a statement the company said it hoped dialogue with government may yet resolve its future.
The news follows Scottish Power’s announcement last month that its 2.4GW coal fired plant at Longannet will close in March 2016.
Environmental groups will welcome the closure of the UK’s oldest, most polluting plants. However, the shortfall in new, reliable baseload power may worry business leaders.
The department of energy and climate change though said there were no new concerns over security of supply.
“This is obviously disappointing news for everyone connected with Eggborough, but people can be assured that energy security will be unaffected,” said a Decc spokesperson.
“The Government takes security of supply very seriously and has worked with National Grid to put in place an effective plan which is flexible enough to adapt to individual plant closures. Our top priority is making sure UK families and businesses have secure, affordable energy supplies – we have ensured that National Grid has everything it needs to manage the system.”