Cookies on the ICIS website

close

Our website uses cookies, which are small text files that are widely used in order to make websites work more effectively. To continue using our website and consent to the use of cookies, click away from this box or click 'Close'

Find out about our cookies and how to change them

E.ON first to reveal LCPD electricity plant closing date in UK

09 Mar 2012 12:22:15 | edem

ICIS_00092438.jpg

E.ON's 1.9GW Kingsnorth coal-fired electricity plant is the first power station in the UK to declare its closing date under the EU large combustion plant directive (LCPD).

But, according to Elexon data, ScottishPower's 1.2GW Cockenzie coal-fired plant has the fewest running hours remaining.

Utility E.ON said on Thursday that the Kingsnorth plant will stop generating power in March 2013. At the end of February, the southern England station, had used 79%, or 15,745, of its allotted 20,000 hours.

E.ON also confirmed that it is withdrawing its application for development consent for two new coal-fired units, totalling 1.6GW, which would have been fitted with carbon capture and storage technology at the Kingsnorth site.

The project was one of two schemes shortlisted as part of the government's competition to build the UK's first commercial CCS scheme (see EDEM 20 October 2010).

"But, with the market still not conducive to building the supercritical power station, it became clear the development could not be completed within the government's timetable," E.ON said.

E.ON UK chief executive Tony Cocker said the firm "does not rule out future power generation on the site", but he labelled the original plans "no longer appropriate".

Running hours

Under the LCPD, polluting power stations commissioned before 1987 - coal and oil plants in the UK - are defined as "existing plants". Such plants can either comply with the LCPD by installing emission abatement equipment, or opt out of the directive.

Opted-out plants can operate for a maximum of 20,000 hours between 2008, which was when the legislation came into effect, and the end of 2015 - whichever comes first see EDEM 12 May 2011.

As a result, the UK will lose 8.7GW of coal-fired power generation capacity, as well as 3.0GW of oil-fired peaking plant.

E.ON's declaration led market participants to speculate as to which opted-out plant will be next to stop generating.

Both E.ON and RWE have converted units at Ironbridge and Tillbury - formerly dedicated coal-fired plants - to burn biomass, which should see the plants run until at least 2015 (see EDEM 19 January 2012).

ScottishPower's Cockenzie 1 and 2 units, each 300MW, have 1,943 hours left, while units 3 and 4, also each 300MW, have 3,037 hours.

Consultants say ScottishPower might want to burn off hours quickly because of plans to use land adjacent its units for new build (see EDEM 12 August 2009). Unused hours cannot be transferred to another plant under the LCPD.

The Scottish government has given ScottishPower permission to construct a 1GW natural gas-fired electricity plant at Cockenzie (see EDEM 5 October 2011). The existing plant also benefits from reduced generation tariffs from National Grid.

The 3.3GW Didcot coal-fired plant has 7,801 hours, or 39% left to use.

Dark spreads

Coal-fired power plants have, in general, been running as baseload capacity in the UK for some time due to historically high profit margins, which have seen generators eat into their LCPD running time allowance.

The front summer clean dark spread, which takes the cost of carbon emissions into account, was last assessed on Wednesday at £11.71 (€13.97)/MWh. This was up by £3.87/MWh from £7.84/MWh on 7 March 2011.

This compared with a corresponding clean spark spread of just £1.81/MWh on Wednesday, indicating that coal plants are likely to run as baseload for the foreseeable future. FOR/JS

Other Related Stories

Other Options