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Released June 23, 2015 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Two U.K. gas-fired power plants have won short-term reprieves from imminent closure after securing a 10-month work contract.
The Killingholme and Brigg power stations in Lincolnshire, England, which are owned by Centrica plc (OTC:CPYYY) (Windsor, England), one of the U.K.'s leading gas and energy companies, were mothballed in March. However, Killingholme has been picked to take part in the Strategic Balancing Reserve (SBR) program for 2015-16, which is operated by National Grid plc (NYSE:NGG) (London), the country's grid operator. The smaller plant at Brigg will become a distributed generator, providing a direct supply to the local network.
National Grid's SBR aims to avoid blackouts by contracting electricity generation from plants not bidding to enter the electricity market and which would be able to respond to high demand or the sudden loss of power from other plants.
The good news was welcomed by Prospect, a U.K. energy workers' union.
Negotiator Michael Macdonald said: "The success of the Killingholme's bid and progress on the future of Brigg is a testament to the commitment of our reps and provides some breathing space for colleagues at both sites. The unions and Centrica see the short-life extension as positive news for all. The move towards a planned medium-term approach to capacity will reduce costs to the consumer as tight capacity margins push prices up. It will also bridge the gap between the planned closures of both sites and other projects coming online in the Humber valley that could provide our members with redeployment opportunities."
Killingholme has a generating capacity of 665 megawatts (MW), while Brigg generates 244 MW. In February, Centrica had announced the mothballing of both plants after failing to sell them off over the past year.
Last May, Centrica revealed plans to sell off most of its gas-fired power plants due to weak power demand and increased competition from coal-fired plants and renewables. The company wants to sell its Langage, Humber and Killingholme CCGT plants, which have a combined generating capacity of 2,700 MW. For additional information, see May 19, 2014, article - Centrica Selling Three Gas-Fired Plants.
Gas-fired generation has undergone a tough few years in the U.K.--and across Europe--thanks to high gas prices and competition from a resurging coal-fired sector, which has enjoyed the benefits of cheap coal imports from the U.S.
Utility E.ON (XETRA:EOAN) (Düsseldorf, Germany) announced in March that it was withdrawing its 900-MW Killingholme combined-cycle gas turbine (CCGT) plant--situated near the Centrica plant of the same name--from the U.K. electricity grid. The decision came after the plant failed to win support in the recent Capacity Market Auction conducted by National Grid. For additional information, see March 23, 2015, article - E.ON Pulls Killingholme Gas-Fired Plant From Service.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
The Killingholme and Brigg power stations in Lincolnshire, England, which are owned by Centrica plc (OTC:CPYYY) (Windsor, England), one of the U.K.'s leading gas and energy companies, were mothballed in March. However, Killingholme has been picked to take part in the Strategic Balancing Reserve (SBR) program for 2015-16, which is operated by National Grid plc (NYSE:NGG) (London), the country's grid operator. The smaller plant at Brigg will become a distributed generator, providing a direct supply to the local network.
National Grid's SBR aims to avoid blackouts by contracting electricity generation from plants not bidding to enter the electricity market and which would be able to respond to high demand or the sudden loss of power from other plants.
The good news was welcomed by Prospect, a U.K. energy workers' union.
Negotiator Michael Macdonald said: "The success of the Killingholme's bid and progress on the future of Brigg is a testament to the commitment of our reps and provides some breathing space for colleagues at both sites. The unions and Centrica see the short-life extension as positive news for all. The move towards a planned medium-term approach to capacity will reduce costs to the consumer as tight capacity margins push prices up. It will also bridge the gap between the planned closures of both sites and other projects coming online in the Humber valley that could provide our members with redeployment opportunities."
Killingholme has a generating capacity of 665 megawatts (MW), while Brigg generates 244 MW. In February, Centrica had announced the mothballing of both plants after failing to sell them off over the past year.
Last May, Centrica revealed plans to sell off most of its gas-fired power plants due to weak power demand and increased competition from coal-fired plants and renewables. The company wants to sell its Langage, Humber and Killingholme CCGT plants, which have a combined generating capacity of 2,700 MW. For additional information, see May 19, 2014, article - Centrica Selling Three Gas-Fired Plants.
Gas-fired generation has undergone a tough few years in the U.K.--and across Europe--thanks to high gas prices and competition from a resurging coal-fired sector, which has enjoyed the benefits of cheap coal imports from the U.S.
Utility E.ON (XETRA:EOAN) (Düsseldorf, Germany) announced in March that it was withdrawing its 900-MW Killingholme combined-cycle gas turbine (CCGT) plant--situated near the Centrica plant of the same name--from the U.K. electricity grid. The decision came after the plant failed to win support in the recent Capacity Market Auction conducted by National Grid. For additional information, see March 23, 2015, article - E.ON Pulls Killingholme Gas-Fired Plant From Service.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
