Work Stops on U.K.'s Only New Gas-Fired Power Plant

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Carlton Power (Stokesley, England), the company behind the proposed, $1.5 billion gas-fired Trafford Power Station in Manchester, has returned a subsidy of £450 million ($556 million) to the government after admitting that the plant may not be completed on time.

The vital grant was granted as part of the U.K.'s government's capacity market scheme on condition that the power plant was commissioned by the end of 2019. Construction has now been put on hold.

Carlton Power has struggled in recent years to raise the investment necessary to get the 1.9-gigawatt (GW) plant built. For additional information, see October 15, 2015, article--No Backers Found for U.K. Gas-Fired Power Plant.

Trafford Power Station, which would be capable of powering 2.2 million homes, is the U.K.'s only new gas-fired project on the horizon and was the only gas-fired project to receive funding from the capacity market scheme, which promises plant owners a guaranteed sum for power produced over a fixed period of time. The company would have received £30 million ($37 million) per year for 15 years for generating power, but it failed to secure financial close on the project by the July deadline, nor at the end of a three-month extension. Carlton Power insists that it is still forging ahead with the project, stating that construction could get under way in 2017 if it can secure additional financing.

"This decision has been taken with regret but we understand that the government needs to have a clear picture of what generation capacity is going to be physically available in the future and we did not have sufficient certainty that our Trafford combined-cycle gas turbine project would be completed in the time required," said developer Carlton Power said in a statement.

"It has been acknowledged by the government and others that new high-efficiency CCGT plants are essential for the U.K. market in order to achieve the aims of security of energy supply and low cost of energy with the smallest possible environmental impact. However, it has become increasingly apparent that the current arrangements for supporting the development of new generation capacity do not give sufficient comfort for this to be brought forward without substantial and unacceptable risk to investors."

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