UK Power Station Capacity

By Paul Homewood

We’ve looked at power capacity scenarios for 2050, but that of course is much too far away for us to know what the grid then will actually look like. If in 2040, say, the powers that be realise we are heading for oblivion, I strongly suspect they will simply go back to building an army of CCGT plants again, and repudiate the nonsense bestowed upon them by the current crop of idiots.

However we can realistically foresee what the grid will look like in the mid to late 2020s.

We currently have 55.8MW of dispatchable capacity. This is based on BEIS data at the end of 2019, but excludes Hunterston B nuclear, which we now understand won’t reopen.

It also excludes two CCGTs, Sutton Bridge and Baglan, which are mothballed due to being in administration – these may be bought from the Receiver, but interest at the moment seems non existent.

[By the way – the lists which follow are to my best knowledge. If anybody has more information, please let me know and I will update].

Obviously, all coal plants are due to close by 2025. Also all nuclear plants, other than Sizewell B are currently due to close between 2023 and 2030. Whether some are allowed to extend their lives remains to be seen.

Some older CCGTs may also close, but most date from the 1990s, so should still be operational after 2030.

The biggest area of uncertainty concerns potential new CCGTs. My list includes only Keadby, which is already under construction. However there are a batch which have received planning approval, but which are all still waiting final investment decisions:

	GW	Due to close	New	GW
	Current	By 2030	Additions	2030
Coal	6.8	6.8		0.0
CCGT	28.7		0.8	29.5
Nuclear	8.3	6.3	3.2	5.2
OCGT	2.2			2.2
Hydro	1.4			1.4
Biomass	3.7			3.7
Others	4.7			4.7
TOTAL	55.8	13.1	4.0	46.7

Drax specifically say that they are waiting for a Capacity Market contract before going ahead, and I suspect the rest are too.

Certainly some have been on the shelf for some time now. For instance, EPUKI received approval to build Kings Lynn and Eggborough in 2018, but have not got any further. Their Annual Accounts, signed off in June this year, states:

https://find-and-update.company-information.service.gov.uk/company/09255154/filing-history

Which does not sound to me as if they are going to start construction any time soon. I suspect the same applies to Teeside and Ferrybridge.

The big problem lies in the way the Capacity Market mechanism works, in that it favours existing operators, who can bid low.

It also allows bids from storage, demand side response and small scale peakers such as diesel engines. These are all low cost options, but can only offer short term capacity, typically for an hour or two. As such, they cannot offer the baseload which CCGT can, and which the Capacity Market was originally set up to encourage.

We have already seen the planned new CCGT at Trafford abandoned, despite winning a Capacity Market contract, because the finances simply did not stack up. With CCGTs being increasingly marginalised by heavily subsidised renewables,

Trafford’s contract was priced at £19.40/KW/Yr, meaning it was worth £32m a year for 15 years. But even this was not enough to make building the new plant profitable, as trading losses would be greater.

The economics have not changed, and I doubt whether these other new entrants will find it profitable to go ahead, unless the next Capacity Market auction comes up with much higher prices.

There is one other consideration. Net Zero commits to eventually phasing out conventional CCGTs, unless they can fit Carbon Capture & Storage (CCS). This could come as soon as the 2030s.

If Drax, for instance, go ahead now with their new plant, they may only get 15 years of operation out of it, unless they are prepared to pay out millions more fitting CCS at some stage. Hardly an enticing prospect, when investments like this need an income stream of at least thirty years to recover capital costs.

Even with all of these planned CCGTs, UK capacity looks extremely tight, given the extra demand on the grid in years to come.

Without them, the situation looks dire.