Two Gas-Fired Plants Postponed in U.K.

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Two of the U.K.'s largest energy companies have postponed plans to build two new gas-fired power plants because of weak power demand brought about by the global economic recession.

E.ON AG (OTC:EONGY) (Dusseldorf, Germany) has decided not to go ahead with the planned Drakelow combined-cycle gas-turbine (CCGT) plant in Staffordshire, England, while Scottish and Southern Energy plc (OTC:SSEZY) (SSE) (Perth, Scotland) is delaying the proposed Abernedd gas-fired plant at Baglan Bay in Wales until 2015. The Drakelow D gas plant is a 1,200-megawatt (MW) plant that was scheduled to open in 2013, while the 874-MW Baglan Bay plant was scheduled to be commissioned in two stages in 2013 and 2015. The first stage has been pushed out to 2015. Both companies have cited weak power demand for the postponements.

"In May 2009, SSE acquired Abernedd Power Company Limited from BP Alternative Energy," SSE stated in the company's full-year financial report. "Abernedd has applied for consent to construct and operate a new CCGT power station, with a capacity of over 800 MW, on a brownfield site in Baglan Bay in South Wales, where there is already in place electricity transmission, gas and water infrastructure for the first phase of the power station. Subject to planning consent being secured, SSE has decided to schedule construction of the new power station with a view to the generation plant first becoming operational in around 2015, which is slightly later than originally envisaged, but reflects the short-term fall in demand for electricity following the economic downturn in the U.K."

In March, SSE announced that it will likely shut down the 660-MW Unit 2 at the Peterhead gas-fired plant in Aberdeenshire, Scotland, due to weaker demand and because of "unfavourable charges" associated with being connected to the transmission grid. The remaining Unit 1, which has a generating capacity of 1,180 MW, will remain unaffected. Unit 1 is used for baseload operation, while Unit 2 is used to top up supply during times of increased demand and outages at Unit 1. A final decision on Unit 2 is expected in the coming months after a full review.

Regarding the Drakelow plant delays, a spokesperson for the U.K. arm of E.ON told Reuters: "Technically we could still make 2013 if we started sticking spades in the ground now. But practically speaking, with demand where it is, that is just not going to happen. We don't have a new date as yet because it'll depend on a recovery in demand."

Last year, E.ON shelved plans to build a new 1,600-MW coal-fired plant at the existing Kingsnorth plant in Kent, England, blaming decreasing power demand brought about by the recession. The controversial plant was also the site of major environmental protests and clashes. For additional information, see October 12, 2009, article - E.ON Shelves £1.5 Billion Kingsnorth Coal-Fired Plant Replacement.

Earlier this year, SSE and partner ESB International, the subsidiary of Ireland's state-owned Electricity Supply Board (Dublin), opened the 842-MW Marchwood CCGT power station near Southampton, which was the first gas-fired plant to open in the U.K. in five years. For additional information, see related news item from January 31, 2010 - Marchwood Power Station Near Southampton Opens for Business.

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