French utility Engie on Monday said it would shut its Staffordshire-based 1GW Rugeley power station this summer, marking the second major UK coal-fired plant closure to be announced in a week.
Engie said it made the decision due to a deterioration in market conditions for coal-fired power in the UK, as well as a continued fall in wholesale power prices and an increase in carbon costs.
“Under such conditions, there is no prospect of the power station recovering its future operating costs,” Engie said in a statement.
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.
According to EU data, the plant, which is 25% owned by Japan’s Mitsui & Co., emitted 4.64 million tonnes of CO2 in 2014, making it the 12th biggest polluting installation in the UK that year. That was down from 6.37 million tonnes in 2013.
Scottish utility SSE last Tuesday announced plans to shut down three units at its Fiddler’s Ferry coal-fired power plant for similar reasons this spring, adding that the fourth unit at Britain’s eighth biggest emitting installation could be taken offline after next winter.
Combined, the two plants emitted 11.5 million tonnes of CO2 in 2014, accounting for 2.2% of the UK’s total GHG emissions that year, according to UK and EU data.
Other large coal plants including Eggborough, Ferrybridge and Longannet are also due to be closed in the coming months.
A spokesman for the UK’s Department of Energy and Climate Change told the Shropshire Star: “There will be no impact on this winter and action has already been taken to secure extra capacity for next winter. We will continue to work alongside National Grid and Ofgem to take whatever additional steps are necessary to protect our energy supply.”
Last year, the UK government announced it was targeting the permanent closure of all coal-fired power plants by 2025.
In 2013, Engie, then known as GDF SUEZ, announced that it had obtained conditional planning approval for the Rugeley plant to be converted to burning cleaner biomass.
By Mike Szabo – mike@carbon-pulse.com
