UK’s 2GW Eggborough power station may close in March 2016
Eggborough Power (EPL) intends to shutdown its 2GW coal-fired power facility in North Yorkshire, UK, by March 2016.
This decision is due to the firm’s unsustainable financial position. High carbon tax, low wholesale power prices, and other market and regulatory conditions have also affected its finances.
Closure of the Eggborough power station, which has the capacity to supply around two million homes, will affect 240 employees.
EPL will soon start the consultation phase with employees and their representatives for potential closure of the facility, which has been running for 53 years.
In order to maintain operations, the coal-fired power plant would require an additional £200m of funding over the next three years, EPL said.
The firm chose to close the facility due to a lack of feasible options for recovering its costs.
Dropping power prices caused by lower commodity costs and recent changes to the bidding rules for the government’s Supplemental Balancing Reserve (SBR) have contributed to the plant’s increased expenditure.
Recent capacity market rules have also impacted the life extension investment for the facility, EPL stated.
In addition to other challenges, Eggborough was expected to cope with the potential environmental permits, effective from 1 January 2016, which are likely to impose constraints on the facility’s emissions, affecting its operational flexibility and further reducing profitability.
EPL had previously tried and failed to secure government support to convert the coal-fired energy station into a biomass facility.
A final decision regarding cessation of plant operations will depend on outcomes of the staff consultation process and further negotiations with government bodies; however, the UK Department of Energy and Climate Change stated that closing the plant will not affect energy security in the country.
A DECC spokesperson said: “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.”
