Second giant coal-fired plant to close – Eggborough joins Longannet

Yorkshire’s 2,000 MW Eggborough coal-fired power station, owned for the last year by the Czech-based Energeticky a prumyslovy holding (EPH), is likely to close at the end of March 2016. Operator Eggborough Power cited a combination of market and regulatory conditions as responsible for the demise of the plant – particularly the continued fall in power prices combined with a continued high carbon tax, which prevents it being able to cover its operating costs.

The 53-year old station would need additional funding of around £200mn over the next three years to continue generating power, says Eggborough Power. The company adds that recent changes to the rules for bidding into the government’s Supplemental Balancing Reserve and changes to Capacity Market rules mean that the plant could not recover some of its costs by these mechanisms. The station had previously failed to gain government support to convert to biomass.

Eggborough power is to begin consultation with its employees on the planned closure. Redundancies are inevitable, although some roles will remain to support decommissioning activities. Construction of the station began in 1962 and the plant began supplying the National Grid in 1970. Initially operated by the Central Electricity Generating Board, ownership passed to National Power at electricity privatisation in 1991; then to British Energy, which was itself bought by EDF in 2009. Eggborough Power became an independent business in 2010.

The closure announcement is not exactly a surprise. At the time of the sale to EPH November 2014, Utility Week reported warnings from Eggborough Power that shrinking profit margins from coal-fired generation would force a shutdown by the end of 2015.

And, as the Department of Energy and Climate Change (DECC) said in a statement: ‘Eggborough is an old power station – over 50 years old – and is inevitably coming to an end of its operational life, as are a number of coal power stations across the country. As old coal comes to the end of its operational life it is significantly less efficient than other plants. Gas plants are more efficient and cleaner so they pay lower carbon taxes whilst contributing strongly to security of supply.’

The DECC spokesperson added that the planned closure will not jeopardise security of power supplies: ‘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.’

The Eggborough move follows confirmation by ScottishPower that Scotland’s even larger, 2,400 MW, Longannet coal-fired power station would also close at the end of March next year, after 46 years of power production. The company had previously announced that closure was likely – see Energy World May 2015 – following National Grid’s decision not to award the station a contract for grid balancing services.

ScottishPower says that the combination of high carbon taxes and high transmission charging means that running a thermal plant in Scotland is uneconomic. The Scottish government is to establish a task force to support the workers, businesses and communities impacted by the closure.