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UK coal-fired power plant closure increases fears of blackouts

08 February 2016

Rugeley Power Station will shut this summer, according to its owner Engie, which cited a "deterioration in market conditions" for coal-fired power stations in the UK as the main reason for the closure. The 46-year-old 1GW station has been hit by a continued fall in market prices and increases in carbon costs, it added.

Stock image
Stock image

The closure of the Staffordshire plant will result in 150 jobs being lost but some workers could be retained for decommissioning and redeveloping the site. A further 190 contractors would also be affected.

Formerly known as GDF Suez, Engie employs 20,000 people in the UK and owns five other power plants, including the 2GW Dinorwig pumped storage facility in north Wales and a 1GW gas-fired power station at Saltend in East Yorkshire.

David Alcock, head of its infrastructure division in the UK, said: "It is with deep regret that we have had to make this decision at Rugeley. Our priority now is to support the employees and help them through this period.

"We implemented a number of changes at Rugeley a year ago in order to help maintain operations at the site but a combination of falling prices and the impact of various market changes has now made this unviable."

Engie blamed the closure of Rugeley on increased carbon costs linked to the UK’s shift to greener energy, alongside low power prices as renewable energy provides increased competition.

The squeeze on fossil fuel generators has been intensified by tougher EU controls on carbon emissions aimed at reducing dependence on fossil fuels.

Last year, the government announced the permanent closure of all coal-fired power plants by 2025, under plans to reduce carbon emissions from the electricity sector.

As well as Rugeley, Eggborough in Yorkshire and Longannet in Fife are slated to close in March, while Ironbridge in Shropshire closed last year and power supplier SSE is to close most of the 2GW Fiddler’s Ferry plant near Manchester.

The GMB union said the government and energy suppliers should "think hard" about the consequences of closing Rugeley and eight other power stations this year and "learn lessons" from November 4 when "National Grid had to invoke special measures to keep the lights on".

Phil Whitehurst, GMB national officer for engineering construction, said " Last month the Institution of Mechanical Engineers warned that the UK faces an electricity supply gap of up to 55% by 2025 because of the closure of coal and nuclear plants."

But the government denied that the UK is at risk of blackouts because of the programme of coal plant closures. A spokesman from the Department of Energy and Climate Change said:
“We are clear that providing a secure supply of affordable energy for our families and businesses is non-negotiable. There will be no impact on this winter and action has already been taken to secure extra capacity for next winter. We will continue to work alongside National Grid and Ofgem to take whatever additional steps are necessary to protect our energy supply.”

Ofgem said it was “confident” about next winter’s power supply but added that there was “no room for complacency”.

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