SSE Plans Unit Shutdowns at Fiddler's Ferry Plant in U.K.

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--SSE plc (LSE:SSE) (Perth, Scotland) has announced plans for the early shutdown of three of the four operating units at the Fiddler's Ferry coal-fired power station in Cheshire, England.

The company said that it is entering into consultation with employees and stakeholders at the plant with a view to ending commercial operations at the units by April 1. It blamed "continuing challenging economic and environmental conditions for coal as the U.K. moves towards a cleaner mix of electricity generation". The fourth unit will be unaffected as it has a contract to provide services to the electricity system for the winter of 2016/17.

Fiddler's Ferry, which was commissioned in 1971, has a total generating capacity of 2,000 -megawatts (MW). The plant failed to win a contract for electricity provision for the 2019/20 period in the recent Capacity Market Auction held by the U.K. government in December. Even though the three units have a Capacity Market contract until 2018/19, SSE said that the "economic outlook in the generation market has changed substantially" since it won the contract and the plant will still "incur unsustainable losses". It said the plant has been loss-making for a number of years and that this was expected to continue to 2020.

"We are fully aware of the impact this will have on our colleagues, their families, and the community and our priority is to support staff during the consultation process," said Paul Smith, SSE managing director, Generation. "The reality is the station is ageing, its method of generating electricity is being rendered out of date and it has been and is expected to continue to be loss-making in the years ahead. Sustaining for too long loss-making power stations would undermine SSE's ability to invest in modern generation plant in the U.K.."

The move comes in a week when French energy firm ENGIE (EPA:ENGI) (Paris, France) announced the summer closure of the 1,050- MW Rugeley coal-fired power plant in Staffordshire, England, citing low power prices and higher carbon costs for its decision. For additional information, see February 15, 2016, article - ENGIE to Shut Unprofitable Rugeley Coal-Fired Plant in the U.K..

The decision worsens the U.K.'s existing problem of spare electricity capacity. Last year, Industrial Info reported that spare capacity stood at just 1.2% facing into the winter, the lowest in 10 years, according to figures released by the country's electricity grid operator, National Grid. For additional information, see July 23, 2015, article - U.K. Risks Winter Blackouts as Power Stations Close.

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