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SSE to fit FGD on Ferrybridge, Fiddler’s Ferry; reports 25% hike in H1 profit

16 Nov 2005 00:00:00

Scottish and Southern Energy (SSE) is to fit flue gas desulphurisation (FGD) at its Fiddler’s Ferry and Ferrybridge coal-fired plants in order to “opt in” to the Large Combustion Plant Directive (LCPD), the company confirmed on Wednesday. The Heren Report first reported that SSE had applied for DTI approval to fit FGD equipment earlier this year (see EDEM 9.123)

SSE said that the full 2,000 MW of capacity at its Fiddler’s Ferry station in Cheshire and half the capacity at its 2,000 MW Ferrybridge plant in South Yorkshire would be covered. While Fiddler’s Ferry has just one chimney stack, Ferrybridge has two. Under the LCPD, the EC considers that plants whose waste gases are discharged through a common stack should be considered as a single plant rather than a ‘plant boiler’ basis.

Around £225 million will be required to fit the equipment, SSE said. This is in addition to SSE’s existing £20 million investment in biomass co-firing facilities. SSE said that preliminary work had already started and is expected to be completed in time to generate ‘desulphurised’ electricity in the first half of 2008. A spokeswoman for SSE said that the company was “working with the DTI and the Environment Agency for ways to legitimately operate in the first half of 2008, including the use of low sulphur coal”.

Installation of the FGD equipment will enable SSE to generate power on an unrestricted basis under the LCPD from 2008. Without the installation, the plants would be forced to limit their output from 2008 onwards and close fully in 2015 in order to meet the conditions of the Directive.

SSE acquired the two power stations from AEP for £136 million, including coal stocks, in July 2004. One of the primary reasons for the relatively cheap price paid by SSE was the plants’ lack of installed FGD equipment.

SSE added that it planned to develop new rail facilities at Fiddler’s Ferry to improve coal and limestone deliveries.

SSE chief executive Ian Marchant said: “We believe that installing FGD represents a good investment opportunity and a step forward in environmental terms. It will also extend the contribution of our coal-fired plant to the security of the UK’s energy supplies and means that we will continue to have the country’s most diverse generation portfolio, with all the advantages that brings.”

SSE reported a 25.5% increase in adjusted pre-tax profit, to £336.3 million, for the first half of financial year 2005/6. The results were the first produced by the company under IFRS.

The company attributed the increase to profit growth in all parts of SSE’s business, although the most significant growth continued to be achieved in the company’s Generation and Supply division as a result of its expanded generation portfolio and an increase in the number of energy customers – up 400,000 since the start of April, to 6.5 million. Operating profit from Generation and Supply rose by 41.8%, to £190 million, contributing 47% of SSE’s total operating profit in H1 2005/06.

Last week SSE increased its gas and electricity domestic tariffs with effect from next January. The company described the outlook for gas and electricity prices as “difficult” and said that it had called for a formal investigation into the lack of liquidity and transparency in the offshore gas market in its submission to the recent Trade and Industry Select Committee’s recent inquiry into security of gas supply.

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