Scottish utility SSE on Tuesday announced plans to shut down three units at its Fiddler’s Ferry coal-fired power plant this spring, adding that the fourth unit at Britain’s eighth biggest emitting installation could be taken offline after next winter.
SSE will open a consultation with employees and stakeholders regarding its proposal, and while a final decision has not yet been taken, the Perth-headquartered firm said it expects to shut three units by Apr. 1 because the plant has been incurring “substantial losses in recent years, and this is expected to continue through to 2020”.
“The fourth unit will be unaffected as it has a contract to provide services to the electricity system for the winter of 2016/17.”
With a total generation capacity of nearly 2 GW, Fiddler’s Ferry emitted 6.86 million tonnes of CO2 in 2014, according to EU data, or more than 3% of the UK’s total emissions under the EU ETS that year.
The plant’s CO2 output has been on the decline, falling from 8.45 million in 2013 and a peak of 9.14 million in 2012, and its closure will further dampen already weak utility demand for carbon units.
SSE blamed “challenging economic and environmental conditions for coal as the UK moves towards a cleaner mix of electricity generation.”
The UK’s carbon floor price, which nearly doubled last April to £18/tonne, likely played a large role in the decision as analysts have pointed to it, along with falling gas prices, as being largely responsible for the onset of more fuel switching within Britain’s power sector.
Fiddler’s Ferry failed to win a contract to provide power in 2019/20 under the UK’s most recent capacity market auction in December, and SSE said it will renege on its agreement for the plant to generate electricity in 2018-19 as “it is projected to incur unsustainable losses even with this contract.”
“However our commitment to UK generation remains strong: this winter we have restored 1,135MW of gas-fired generation capacity to commercial operations and since 2008 we have invested £1 billion in thermal electricity generation plants in this country and want to invest more in the future,” the company added.
By Mike Szabo – mike@carbon-pulse.com
