UK coal-fired power plant Eggborough said on Wednesday it may close in March next year amid weak power prices and high carbon taxes.
“A continued fall in power prices driven by the decline in commodity prices, combined with continued high carbon tax, means that Eggborough is unable to cover its future operating costs. This fall in power prices has continued in spite of a number of plant closures and tightening capacity margins,” the company said in a statement.
The company, bought by Czech company EPH last year, said it needed £200 million over the next three years to continue, though a final decision would depend on consultations with employees and the government.
It failed to get cash under the UK’s capacity mechanism funding rounds and said changes to bidding rules meant this would not be a viable option in future.
Eggborough’s output is subject to the UK’s carbon floor price, frozen at £18 (€24.60) per tonne of CO2 last April, and also must buy EU Allowances currently valued at around €8 each for every tonne it emits.
Through the UK carbon tax, the plant is forecast to contribute more than £250 million to the UK economy over the next three years.
The 20 GW plant is more than 50 years old and capable of providing power to 2 million people, or around 4% of British homes.
UK utility ScottishPower confirmed last month it will close its Longannet coal-fired power plant at the end of March 2016, citing a combination of high carbon prices and transmission fees.
By Ben Garside -email@example.com