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Released February 08, 2018 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--One of Northern Ireland's key power plants, Kilroot, could be closed in a matter of months with the loss of 240 jobs following its failure to win a generation contract in a recent all-Ireland power auction.
The plant, which is owned and operated by AES Corporation (NYSE:AES) (Arlington, Virginia), has an installed generating capacity of 560 megawatts (MW) from dual coal- and oil-fuelled generators, plus 142 MW from additional gas turbines. It was the first investment outside of the United States for AES when it acquired the plant in 1992. Another smaller AES plant at Ballylumford also failed to win a contract extension. The company said that auction results for Kilroot and Ballylumford "send a strong exit signal for 36% of dispatchable generation capacity in Northern Ireland to close in 2018."
The company confirmed that peaking units of 258 MW at the Ballylumford and Kilroot power stations, as well as one unit of the Ballylumford B Station (145 MW) received contracts in the first auction for the Integrated Single Electricity Market (ISEM) of the Republic of Ireland and Northern Ireland. However, the second Ballylumford B Station unit (145 MW) and both of Kilroot's generation units (513 MW) were not awarded new capacity contracts. AES U.K. & Ireland said that without new contracts, these three units "cannot cover their fixed costs." The two generation units at Kilroot are expected to close when the ISEM market commences on 23 May 2018, with the Ballylumford generation unit expected to close on 31 December 2018.
AES U.K. & Ireland President Ian Luney expressed his disappointment at the results: "In addition to capacity, Kilroot Power Station has been providing reliable and critical energy and system services for Northern Ireland. Over the last three years Kilroot has been integral to the security of supply in Northern Ireland. The Kilroot units that are set to close met 22% of local electricity demand, so we are surprised by SONI's decision which indicates that the generation capacity would not be needed for security of supply this coming winter."
"As a result of the units not being retained in the auction, difficult decisions will need to be taken that impact the 270 AES employees and 120 full-time contractors that support our operations. We're working to address the uncertainty this decision has brought to their employment as we begin a full statutory consultation process. In parallel, we are working to minimise the substantial impact for our suppliers, offtakers and other key stakeholders."
Robin McCormick, general manager of SONI (System Operator for Northern Ireland) stated that the auction winners will be capable of making up any shortfall. "We are confident that the generators who have been successful in that auction process will provide sufficient and secure generation for Northern Ireland at the lowest possible cost. Further capacity auctions will take place later in 2018 for future periods." Earlier this week, Industrial Info reported that one of Ireland's largest power generators, Viridian Power (Belfast, Northern Ireland), also is preparing to close two power plants in the country's capital city Dublin in May after failing to secure contracts in the same auction. For additional information, see February 5, 2018, article - Viridian to Shut Two Irish Power Plants.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
The plant, which is owned and operated by AES Corporation (NYSE:AES) (Arlington, Virginia), has an installed generating capacity of 560 megawatts (MW) from dual coal- and oil-fuelled generators, plus 142 MW from additional gas turbines. It was the first investment outside of the United States for AES when it acquired the plant in 1992. Another smaller AES plant at Ballylumford also failed to win a contract extension. The company said that auction results for Kilroot and Ballylumford "send a strong exit signal for 36% of dispatchable generation capacity in Northern Ireland to close in 2018."
The company confirmed that peaking units of 258 MW at the Ballylumford and Kilroot power stations, as well as one unit of the Ballylumford B Station (145 MW) received contracts in the first auction for the Integrated Single Electricity Market (ISEM) of the Republic of Ireland and Northern Ireland. However, the second Ballylumford B Station unit (145 MW) and both of Kilroot's generation units (513 MW) were not awarded new capacity contracts. AES U.K. & Ireland said that without new contracts, these three units "cannot cover their fixed costs." The two generation units at Kilroot are expected to close when the ISEM market commences on 23 May 2018, with the Ballylumford generation unit expected to close on 31 December 2018.
AES U.K. & Ireland President Ian Luney expressed his disappointment at the results: "In addition to capacity, Kilroot Power Station has been providing reliable and critical energy and system services for Northern Ireland. Over the last three years Kilroot has been integral to the security of supply in Northern Ireland. The Kilroot units that are set to close met 22% of local electricity demand, so we are surprised by SONI's decision which indicates that the generation capacity would not be needed for security of supply this coming winter."
"As a result of the units not being retained in the auction, difficult decisions will need to be taken that impact the 270 AES employees and 120 full-time contractors that support our operations. We're working to address the uncertainty this decision has brought to their employment as we begin a full statutory consultation process. In parallel, we are working to minimise the substantial impact for our suppliers, offtakers and other key stakeholders."
Robin McCormick, general manager of SONI (System Operator for Northern Ireland) stated that the auction winners will be capable of making up any shortfall. "We are confident that the generators who have been successful in that auction process will provide sufficient and secure generation for Northern Ireland at the lowest possible cost. Further capacity auctions will take place later in 2018 for future periods." Earlier this week, Industrial Info reported that one of Ireland's largest power generators, Viridian Power (Belfast, Northern Ireland), also is preparing to close two power plants in the country's capital city Dublin in May after failing to secure contracts in the same auction. For additional information, see February 5, 2018, article - Viridian to Shut Two Irish Power Plants.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
