Released October 12, 2009 | GALWAY, IRELAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--E.ON AG (OTC:EONGY) (Dusseldorf, Germany) has shelved plans to update the Kingsnorth coal-fired plant in Rochester, England, a project estimated to be worth £1.5 billion ($2.4 billion).
The company claimed that the decision to pull the plug on the addition of two new units (#5 and #6) totaling 1,600 megawatts (MW) to replace four aging units was caused by the global recession and a decrease in electricity demand. Kingsnorth is also the site chosen by E.ON for the proposed U.K. carbon capture and storage (CSS) pilot, the future of which remains in doubt. This casts a shadow over the U.K. government's plans to have up to four demonstration CCS projects up and running by 2015.
The timing of the decision is also worth noting, coming only a couple of days after the European Commission announced that 180 million euros of funding was going to the rival Hatfield CCS project in South Yorkshire, owned by Powerfuel Power Limited (Doncaster, England). The Hatfield project is the only U.K. CCS project to receive EC funding. For additional information, see related news item from October 9, 2009 - Hatfield CCS Project Tipped for European Funding.
"We can confirm that we expect to defer an investment decision on the Kingsnorth proposals for up to two to three years," a spokesperson for E.ON said. "This is based on the global recession, which has pushed back the need for a new plant in the U.K. to around 2016 because of the reduction in demand for electricity.
"As a group, we remain committed to the development of cleaner coal and carbon capture and storage, which we believe have a key role to play alongside renewables, gas and nuclear, in tackling the global threat of climate change while ensuring affordability and security of energy supplies."
E.ON's decision to back down reflects a wider European trend of energy companies' tightening their belts and the growing difficulty they face obtaining permission to build new fossil-fuel power plants. Last month, E.ON was forced by German courts to stop working on the almost-complete 1,050-MW Datteln coal-fired plant in northern Germany and admitted that it has almost given up on plans to build a 1,200-MW gas-turbine electric power plant with OAO Gazprom (OTC:OGZPY) (Moscow, Russia) in the area of Lubmin in Germany. For additional information, see related news item from September 30, 2009 - E.ON Stops Work on Datteln Power Plant.
Despite the company's announcement, the Department of Energy and Climate Change (DECC) said that it expects E.ON to continue with the CCS project at Kingsnorth, claiming that E.ON had not withdrawn from the funding competition.
E.ON submitted a planning application in December 2006 to replace the four existing coal-burning units at Kingsnorth, which were constructed in the late 1960s and early 1970s, with two cleaner 800-MW supercritical coal units. However, the plant has been the centre of high-profile protests by groups demanding that any new Kingsnorth plant should come with a fully working CCS system from the outset. Protesters and environmental groups have been celebrating E.ON's announcement.
Unfortunately, the deferral of the project means that Kingsnorth will continue operating the antiquated, inefficient boilers at the plant for at least two or three more years. A new supercritical coal plant would improve plant efficiency by 20% and reduce carbon emissions by almost 2 million tons per year compared to the plant's current performance.
View Plant Profile - 1078259 1067864
View Project Report - 078000531 73000221
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.
The company claimed that the decision to pull the plug on the addition of two new units (#5 and #6) totaling 1,600 megawatts (MW) to replace four aging units was caused by the global recession and a decrease in electricity demand. Kingsnorth is also the site chosen by E.ON for the proposed U.K. carbon capture and storage (CSS) pilot, the future of which remains in doubt. This casts a shadow over the U.K. government's plans to have up to four demonstration CCS projects up and running by 2015.
The timing of the decision is also worth noting, coming only a couple of days after the European Commission announced that 180 million euros of funding was going to the rival Hatfield CCS project in South Yorkshire, owned by Powerfuel Power Limited (Doncaster, England). The Hatfield project is the only U.K. CCS project to receive EC funding. For additional information, see related news item from October 9, 2009 - Hatfield CCS Project Tipped for European Funding.
"We can confirm that we expect to defer an investment decision on the Kingsnorth proposals for up to two to three years," a spokesperson for E.ON said. "This is based on the global recession, which has pushed back the need for a new plant in the U.K. to around 2016 because of the reduction in demand for electricity.
"As a group, we remain committed to the development of cleaner coal and carbon capture and storage, which we believe have a key role to play alongside renewables, gas and nuclear, in tackling the global threat of climate change while ensuring affordability and security of energy supplies."
E.ON's decision to back down reflects a wider European trend of energy companies' tightening their belts and the growing difficulty they face obtaining permission to build new fossil-fuel power plants. Last month, E.ON was forced by German courts to stop working on the almost-complete 1,050-MW Datteln coal-fired plant in northern Germany and admitted that it has almost given up on plans to build a 1,200-MW gas-turbine electric power plant with OAO Gazprom (OTC:OGZPY) (Moscow, Russia) in the area of Lubmin in Germany. For additional information, see related news item from September 30, 2009 - E.ON Stops Work on Datteln Power Plant.
Despite the company's announcement, the Department of Energy and Climate Change (DECC) said that it expects E.ON to continue with the CCS project at Kingsnorth, claiming that E.ON had not withdrawn from the funding competition.
E.ON submitted a planning application in December 2006 to replace the four existing coal-burning units at Kingsnorth, which were constructed in the late 1960s and early 1970s, with two cleaner 800-MW supercritical coal units. However, the plant has been the centre of high-profile protests by groups demanding that any new Kingsnorth plant should come with a fully working CCS system from the outset. Protesters and environmental groups have been celebrating E.ON's announcement.
Unfortunately, the deferral of the project means that Kingsnorth will continue operating the antiquated, inefficient boilers at the plant for at least two or three more years. A new supercritical coal plant would improve plant efficiency by 20% and reduce carbon emissions by almost 2 million tons per year compared to the plant's current performance.
View Plant Profile - 1078259 1067864
View Project Report - 078000531 73000221
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.
