Britain’s Eggborough coal-fired power plant has won a reprieve after signing a contract with National Grid that will allow it to continue to operate for an additional year from March.

The 2GW plant, which was the UK’s seventh largest emitting installation in 2014 according to EU data, was awarded a contract under the National Grid’s Supplemental Balancing Reserve scheme to provide back-up power next winter.

The new agreement is for 775 megawatts of capacity, the plant’s operators Eggborough Power Limited said in a statement.

The move will increase the UK’s emissions slightly over the next year, and in turn demand for carbon units, compared to what had been expected prior to Tuesday’s announcement.

Eggborough, which is owned by Czech utility EPH, was slated to close next month due to poor market conditions and high running costs – factors that have led to several other major coal plant closures to be announced in the past year.

French utility Engie on Monday said it would shut its Staffordshire-based 1GW Rugeley power station this summer, while Scottish utility SSE last week announced plans to shut down three of four units at its Fiddler’s Ferry coal-fired power plant this spring.

The country’s carbon floor price, which nearly doubled last April to £18/tonne, has likely played a large role in the decisions as analysts have pointed to it, along with falling gas prices, as being responsible for the onset of more fuel switching within Britain’s power sector.

Last year, the UK government announced it was targeting the permanent closure of all coal-fired power plants by 2025.

By Mike Szabo – mike@carbon-pulse.com