Yet another coal fired power station forced to close

Posted: September 3, 2015 by Andrew in Energy

Image Crdeit: Dave ‘Watertowers’ – click for more

Eggborough is the latest of three coal fired power stations to announce plans to close, DECC insists they have a plan.

Not long ago the UK had ten coal fired power stations, now we are soon to have just seven. (EPL) Eggborough Power Limited has announced its closure date, March 2016, with the loss of 240 jobs. Eggborough producing 2GW follows Ferrybridge 1GW & Longannet 2.4 GW.

This reduces the UK’s dispatchable capacity to 53GW below peak demand of 56GW.

EPL would have required 200 million pounds to continue to operate for the next three years, requests for subsidy was refused. In a press release EPL listed the reasons for its closure:

 A continued fall in power prices driven by the decline in commodity prices, combined with continued high carbon tax, means that Eggborough is unable to cover its future operating costs. This fall in power prices has continued in spite of a number of plant closures and tightening capacity margins.

Recent changes to the bidding rules for the government’s Supplemental Balancing Reserve (SBR) which meant that this was no longer a viable option for Eggborough to recover some of its operational costs.

Recent changes to Capacity Market rules which mean that this no longer represents a viable option to support life extension investment.

Recent changes to the renewable subsidies available for biomass conversion which mean that this is no longer a viable option for Eggborough.

Uncertainty regarding Eggborough’s environmental permits from 1st January 2016 which could place greater constraint on emissions, impact operational flexibility and reduce profitability.

EPL had applied for funding to convert to biomass, however it was judged to be too expensive.

A Department of Energy & Climate Change (DECC) spokesman ” The Government takes security of supply very seriously & has worked with the National Grid to put in place an effective plan which is flexible enough to adapt to individual plant closures”

Nothing to worry about then.

  1. Fanakapan says:

    So the electricity production music will stop during the term of the present government, and as they will be all too aware of the shortage of chairs when that occurs, we shall be assured of much entertainment as the G scrambles to avoid the ignominy of being revealed as bluffers.

    Its difficult to see how the production imperative can be reconciled with the Warmist view, which of course should have the effect of multiplying the entertainment factor 🙂

  2. E.M.Smith says:

    So I’d guess peak in UK comes about December? Longest dark, lots of cold, not much wind?

    So a Merthy Christmas for those watching from afar?

    Maybe I need to have a Emergency Power posting up about then…

  3. Peak UK demand usually occurs in January when people go back to work after a long break and we have peak cold.

  4. tallbloke says:

    E.M. My 3.5 KVA LPG fired generator is ready for action, and I have two 20KG bottles of gas in the outhouse to fuel it with. My logs are cut and stacked.

    The UK Govt’s Dept of Energy and Climate Change’s pigs are fed, watered and ready to fly, and their chickens have come home to roost.

    I have enough fuel to produce a very big vat of tar and we could pluck feathers from the roosting chickens.

  5. It will be good to see some burnt fingers from the investors who rely on government subsidies for wind and solar. I have not read about anyone in UK extracting coal seam gas from existing under ground mines. It is done in Australia firstly for safety but it does give some revenue beside supplying power for operations. 5MW diesel generators converted to natural gas can be ordered off the shelf as can 10-50MW gas turbines (or jet engines). In Queensland coal seam gas is extracted from surface drilled wells is piped to liquifaction plants for export of LNG. I would have thought the UK could do something quickly if needed. I am sure it would be viable without subsidy.

  6. u.k.(us) says:

    Scrap the plants if you will, but hold on to the engineering needed to build one.

  7. tallbloke says:

    The proposed Hinkley Point nuclear power station has been delayed and will not start generating power in 2023 as planned, developer EDF has admitted.
    Jean-Bernard Levy, EDF chief executive, insisted he had “full confidence in the success of the Hinkley Point project” but gave no date for when the £24.5 billion power station might now start generating electricity.
    The latest delay raises the prospect that Hinkley – widely expected to be Britain’s first new nuclear plant in a generation – may now in fact be overtaken by other proposed nuclear projects with far quicker build times.
    EDF said in 2013 that it planned for Hinkley to be generating electricity by 2023, subject to a final investment decision (FID) in July 2014.
    But a decision has yet to be taken, following a protracted EU state aid inquiry and extended negotiations with the UK Government over subsidies and with Chinese investment partners.

  8. A C Osborn says:

    To say nothing of the Design and Qulity Problems their current proposal has.
    I am sure that the Government have enough grounds for cancelling the whole project as any sensible person would do.
    But then again we know they are not sensible people don’t we.

  9. tallbloke says:

    ACO: There is a move afoot to roll the DECC into the industry dept, with nuclear decommissioning shifted to DEFRA. It might be that cooler heads will prevail yet. Not that this addresses the shortage of generation capacity we are facing.

  10. Keith Willshaw says:

    cementafriend wrote

    ‘I have not read about anyone in UK extracting coal seam gas from existing under ground mine.’

    In fact there is one commercial operation in England operated by IGas Energy using coalbed methane wells at Doe Green. Such operations have been outlawed by the SNP in Scotland and are opposed by the Welsh Assembly. The usual suspects virulently oppose its use.

    Compare and contrast the Doe Green installation with your typical wind farm

  11. Keith Willshaw says:

    Tallbloke wrote

    ‘ACO: There is a move afoot to roll the DECC into the industry dept, with nuclear decommissioning shifted to DEFRA’

    Nuclear decommissioning is actually overseen by the Nuclear Decommisioning Authority. The DECC are in the reporting line of the NDA but neither fund nor control its work. Funding is actually provided by The Shareholder Executive which is part of the Department for Business, Innovation & Skills. This is the successor to the old Board Of Trade who use to run the NDA so removing he DECC would just be cutting a level of useless bureaucracy.

    The involvement of DEFRA has been in place for over 10 years because parts of the NDA activity involves using landfill for low level waste and DEFRA have the task of ensuring that such operations pose no risk to the food chain. A perfectly reasonable arrangement in my opinion.

    Oversight of NDA operations is carried out by the Office for Nuclear Regulation’s through its Nuclear Installation Inspectorate who to my personal knowledge are very strict on things being done safely and thoroughly.

  12. tallbloke says:

    Thanks Keith. I obtained some spreadsheets of DECC monthly accounts a few years ago. Decommissioning was a large item on them.

  13. gallopingcamel says:

    A 2 GW coal plant produces over 40,000,000,000 kVAh in three years. Thus a 200 million pound subsidy amounts to about 0.5 pence per kVAh.

    There is no need for a subsidy if you allow the power station to hike its price by 0.50 pence per kVAh.

    How is it that a “Subsidy” of 0.5 pence per kVAh for a coal fired is unthinkable in a country that was until recently paying a 25 pence subsidy per kVAh for solar power?

    You Brits need more businessmen and fewer lawyers in Westminster.

  14. tallbloke says:

    GC: And engineers. I only got 10% of the vote with my bid to become an MP though.

    By Andrew Critchlow, Commodities editor6:45PM BST 05 Sep 2015

    Picture a cold and dark wintery evening in November and millions of householders across the country are switching on their kettles at the same time after a long day at work but suddenly there is a big problem.

    Another creaking coal-fired power station has been shut down and with barely a breeze blowing to fire up the thousands of wind turbines that Britain has increasingly relied upon to keep the lights turned on, the entire electricity network has become overloaded.
    Suddenly, the doomsday scenario of a nationwide energy blackout and power curfews on a scale not seen since the bleak winter of enforced economic hardship of 1979 becomes reality.
    This is the fear of experts like Anthony Price, director of Electricity Storage Network, who argues that policymakers have allowed the system to become too vulnerable to outages, which could cost the economy billions of pounds in lost output and productivity.
    “As a society we run the risk of paying the price eventually for running everything with the very minimum of spare capacity available,” said Mr Price. “If something does go wrong with the existing generating system we really have no where to run to meet demand.”

    His concerns were brought into sharper focus last week with the announcement that the Eggborough power station in Yorkshire would close in March 2016. The plant generates around 4pc of the UK’s electricity and its shutdown at the end of the winter will place a further squeeze on the safety cushion for avoiding a blackout across large areas of the country.
    Conventional fossil-fuel burning power stations like Eggborough and the Longannet coal-fired plant in Fife that is also due to close in March are still the most reliable means to produce electricity for the grid, despite the dramatic shift over the last decade towards renewables such as wind or solar.
    However, there are growing concerns that such a change to generating more of the country’s 85 gigawatts of power from renewables has left the grid dangerously exposed.
    According to analysts at the investment bank Jefferies, the closure of Eggborough will mean that over 16 gigawatts of coal-fired capacity – which is enough to provide electricity for a dozen large cities – will have been shut down over the last four years. At the same time, Britain has installed only 6,000 megawatts of new easily “dispatchable” generation capacity to meet any potential shortfalls that may arise.

    Britain faces potential power shortages in the next four years
    Although renewables accounted for a record 22.3pc of the UK’s total electricity generation in the first quarter of this year, conventional coal, gas-fired and nuclear plants remain the backbone of the country’s energy supply infrastructure. Coal burning plants still provide around 40pc of the UK’s electricity. Unlike wind turbines, fossil-fuel burning plants like Eggborough, which the government appears so keen to see phased out, can be turned on or off with the flick of a switch.
    “Things are moving into uncharted territory in terms of security of supply,” said Peter Atherton, utilities equity analyst at Jefferies. “We have never had such a low ratio of conventional power plant capacity compared with renewables and the problem is going to get worse.”
    The announcement in May by SSE that it would be closing the giant Ferrybridge power station in Yorkshire by March 2016 has also raised the stakes for regulators who are duty bound to ensure Britain has enough power. Based on the recent closures, power supply levels published by Ofgem show that Britain will be perilously close to blackouts by the winter of 2016 if wind levels prove to be too low to generate adequate electricity for the grid.
    According to Mr Atherton the problem started with the Labour government under the former Prime Minister Tony Blair which committed Britain to unachievable targets for building renewable energy capacity.

    The suspicion is that Mr Blair went into European climate talks in 2007 not even knowing the difference between energy – which covered everything from transportation to home insulation – and electricity. Almost a decade later, this possible schoolboy error by Mr Blair and his negotiating team could lead to blackouts for the “first time in living memory”, Mr Atherton believes.
    “Germany and Spain for example don’t have the same security of supply problem as we do. We are unique in that we have a problem with supply and affordability of power,” he said.
    The Coalition and the new Conservative Government have essentially continued along with the same unrealistic policy which has committed Britain to generating around 80pc of its power from renewables and nuclear by 2030. Another problem according to Mr Atherton is the need to build more latency into the renewable network.
    He estimates that to replace 1 gigawatt of conventional coal or gas generated power capacity it requires the equivalent of around 3.5 gigawatts of renewables.
    “The problem is that the closure programme for conventional plants like Eggborough is running to time but the new build programme is now about four years behind schedule. There is a big mismatch between what is getting shut down and what is getting built to replace it,” said Mr Atherton.

    Jobs: The energy sector has launched the UK’s first wind turbine apprenticeship scheme.
    Wind turbines can’t replace coal as a back up Photo: PA
    With conventional fossil-fuel burning plants expected to simply serve as back up for renewables and nuclear from 2030 onwards, the cost of construction is also an issue, according to John Feddersen, chief executive officer of Aurora Energy Research based in Oxford. He estimates that the cost of constructing a new combined-cycle gas turbine electricity plant capable of producing around 1,000 megawatts of power is around £700m in the UK, which is expensive given that these plants will increasingly be used as standby facilities.
    “There has been less construction than expected because of this,” he said. Mr Feddersen questions whether it is economically feasible to maintain a 5pc capacity buffer to ensure the security of supply given the cost of construction and maintenance.
    Further uncertainty is being caused by the potential delay of the landmark £24.5bn Hinkley Point nuclear plant. Originally earmarked to start producing electricity by 2023 its developer EDF has recently rowed back on the date for when the plant will actually open. Construction work on the nuclear facility is being held up by delays to taking a final investment decision on the project, which is vital to meeting the UK’s power needs beyond 2020.
    Protesters blockade nuclear power station: The new reactors at Hinkley would be the first of eight new nuclear power stations to be built in the UK
    Illustration of the proposed Hinkley Point C plant Photo: EDF Energy
    EDF and its Chinese investment partners have so far failed to secure additional funding for the project from investors. The scheme is also being bogged down by negotiations with the Government over potential subsidies and a protracted EU enquiry into state aid.
    Ultimately, National Grid is responsible for ensuring that the country has enough power to meet demand in any eventuality. It has been mandated to buy what it describes as “balancing services” from suppliers. As of July the grid had procured at a cost of £36m an additional 2.56 gigawatts of power, which means it will have a margin of 5.1pc spare capacity with which to balance the network.

    Although this should be enough of a buffer to avoid a shortfall, or the imposition of emergency measures such as requiring some industrial users to shutdown during peak load periods, the system remains vulnerable to unforeseen plant shutdowns and adverse winter weather conditions. Nuclear plant operator EDF was forced at the end of last year to take its reactors at Haysham and Hartlepool down for safety reasons.
    The grid is currently in the final stages of conducting a public consultation before it published its closely-watched winter outlook report, which will provide the latest figures on the state of supply and demand. Although few experts expect a shortfall this winter there is growing concern that blackouts could be unavoidable by the end of 2016. “There is never a 100pc guarantee of keeping the lights on but the margins are manageable this winter,” said a spokesperson for National Grid.
    Of course any blackouts can be avoided by the National Grid and the Government by paying suppliers to keep plants open that were scheduled to be shutdown. Eggborough’s owners have already said that the plant will need £200m in fresh funding to remain open for another few years but that is unlikely to be forthcoming.
    Mr Atherton said: “The National Grid has a legal duty to make sure the lights stay on in the winter.”

  15. old44 says:

    “put in place an effective plan which is flexible enough to adapt to individual plant closures”

    Three plants are not individual closures, they are group closures.

    56GW requirement into 53GW availability without blackouts is not possible unless you use New Math.

  16. tallbloke says:

    Britain’s energy ministry has rejected four planned onshore wind farms in Wales, it said in a statement on Monday.

    Earlier this year the Department of Energy and Climate Change (DECC) said Britain would scrap all new subsidies for onshore wind farms from April 2016, when it closes a renewable support scheme.

    A statement from DECC said, “Careful consideration has been given to each application, and the planning and energy issues involved.”

    The UK decision on subsidies, which comes ahead of U.N. climate change talks in Paris later this year where world leaders will seek to sign a deal to curb greenhouse gas emissions, was criticised by the renewable energy industry.

    “Given the blows the UK government are raining down onto the renewable energy sector on both consents and subsidies, ministers will be heading to the Paris climate discussions with their credibility in tatters,” said David Clubb, director of Welsh renewable energy trade association RenewableUK Cymru.

    More than 2,500 wind turbines, amounting to 7.1 gigawatts (GW) of electricity production capacity, are now unlikely to be built in Britain because of the fast-tracked subsidy cut outlined by the government.

    Monday’s decision relates to the proposed Llanbadarn Fynydd, Llaithddu, Llanbrynmair and Carnedd Wen wind farms, which would have had a combined capacity of more than 300 megawatts (MW).

    The government gave approval for Scottish Power to replace turbines at its 100 MW Llandinam Windfarm in Walesy, but an application for connecting power lines was refused. The company said it would need to reconsider its plans for the site.

  17. tallbloke says:

    And there’s more:

    The UK is set to reject construction of the 970MW Navitus Bay offshore wind project over concerns about the jurassic coast losing its UNESCO World Heritage status.
    While the project developers are seeking planning permission for the work, authorities are expected to reject the proposal.

    Refusal by the ministers follows ‘an unprecedented recommendation by the Planning Inspectorate that permission should be refused,’ reports The Telegraph.
    Dutch energy group Eneco Holding and French EDF’s green energy unit have a 50:50 share in the project through Navitus Bay Development consortium.

    The offshore project was initially expected to have 121 turbine installations for a 970MW power generation capacity, and 78 turbines under a Plan B to have 630MW capacity.
    Critics of the project argue that the turbines, which are expected to reach a height of 650ft, will ruin the views, affect tourism, and may result in loss of the jurassic coast’s UNESCO World Heritage Site status.

    The project has encountered unexpected controversies and has had more objections submitted to the Planning Inspectorate than any other offshore windfarm to date, the news daily said.
    If operational, the project could meet the energy requirements of nearly 700,000 UK households. It is expected to deliver up to £1.6bn as economic benefit for the region, and create up 1,700 jobs during construction.

    Navitus Bay project director Stuart Grant was quoted by The Telegraph as saying: “We believe in the strength of our proposal, which showcases how Navitus Bay would make an important contribution to the local economy and to the UK’s renewable energy and carbon reduction targets.”

  18. watertowers says:

    Don’t forget to credit a copyright photograph

    [Reply] My apologies. Credit now added. Please let us know if you want the image removed. Cheers, Rog Tallbloke