Two More CCGT Plants To Be Mothballed

By Paul Homewood


h/t stewgreen


Don’t say you were not warned!



Two power plants are to be put into a "dormant state of managed preservation" to allow administrators more time to recover costs for creditors.

The operating companies for Severn Power Station, Newport, and Sutton Bridge, Lincolnshire, called them in after holding company, Newport-based energy group Calon Energy, went into administration in June.

Both plants employ 68 staff combined.

A third site, Baglan Bay Power Station, Port Talbot, is unaffected.

It is part of the group but remains under the control of its directors, said administrators at KPMG.

Joint administrator Jim Tucker said: "The recent and ongoing challenges facing the UK power market mean that these power stations are currently not generating sufficient returns to continue trading effectively.

"It has therefore been determined that the power plants will be placed into a safe and dormant state of managed preservation to provide more time to explore all options in order to recover value for the group’s creditors."

The company’s three sites all operate combined cycle gas turbines.

It had plans to build a new combined cycle gas turbine at the former Willington power station in Derbyshire. 

The two plants have a combined capacity of 1.7 GW, so represent a significant part of Britain’s CCGT base of about 30 GW. And they are not old plants either – Sutton Bridge began operations in 1999 and Severn in 2010.

Any fool could have seen this coming. Energy companies simply cannot afford to keep gas plants ticking over at such low levels of capacity, because of competition from heavily subsidised wind power.

In theory, idled capacity should be supported by Capacity Market payments, whereby the government pays for standby capacity. The price is set by auction each year.

In practice, existing generators, including coal and nuclear power stations, have hoovered up contracts at rock bottom prices. But all of the coal and most of the nuclear plants will be shut this decade, leaving a potential gap before new CCGT capacity can be built. This gap will be even more serious if other existing gas plants shut in the meantime.


August 25, 2020 at 12:12PM

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