Another power station closing early

Posted: February 3, 2016 by Andrew in Energy, fuel poverty, Politics
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credit: Kirkpia.org

Britain’s energy situation goes from tight, to critical, with an announcement from SSE.

The Telegraph reports tonight that SSE has decided to close three out of its four units at the Fiddler’s Ferry power station.

Emily Gosden (Telegraph) writes :

SSE has announced plans to shut most of its Fiddler’s Ferry coal-fired power plant in April, wiping 1.5 gigawatts of power capacity from the UK grid and worsening the looming energy crisis next winter.
The energy giant said it intended to shut three out of four units at the loss-making Cheshire power station, reneging on a Government subsidy contract to keep them running until 2018-19 and putting 213 jobs at risk.
The move, which the Telegraph revealed SSE was considering last week, was condemned as “extremely disappointing” by the Government, which sought to reassure households the lights would stay on.
“We will continue to work alongside National Grid and Ofgem to take whatever additional steps are necessary to protect our energy supply,” a spokesman for the Department of Energy and Climate Change said.

Burning coal at Fiddler’s Ferry is increasingly uneconomic due to low power prices and the UK carbon tax.
UK energy supplies were already forecast to fall to dangerously low levels next winter due to the closure of several other old plants.
Emergency measures have been brought in to bolster supplies after official analysis suggested there could be zero spare capacity in the market, and insufficient power to keep the lights on on a windless day.
John Musk, analyst at RBC Capital Markets, warned UK margins would now be “critically tight for next winter” and forecast this would lead to “extremely volatile” spot power prices.

SSE will face a £33m penalty for pulling out of its Government contract but said the alternative was to incur “unsustainable losses” which would “undermine SSE’s ability to invest in modern generation plant in the UK”.
Fiddler’s Ferry had already racked up “substantial” losses in recent years and this was expected to continue through to 2020, even with the subsidy contract, it said. Analysts estimate annual losses of £30m-£50m.
SSE said coal plants were running less often than they used to as they were pushed out by “cheaper alternatives, namely low carbon and gas-fired generation”.

This trend was only forecast to continue, it said, citing energy secretary Amber Rudd’s announcement last year that all coal plants would close by 2025.
Fiddler’s Ferry, which was opened in 1971, would also require “significant levels of expenditure to maintain safe operations and adequate levels of reliability”, it said.

In 2014 SSE secured a subsidy contract, estimated to be worth £27m, through the Government’s capacity market, which was supposed to guarantee the three units would be available to help keep the lights on in 2018-19.
SSE said that the economic outlook in the generation market had “changed substantially” since then and the plant was “projected to incur unsustainable losses even with this contract”.
In December it attempted but failed to secure a similar contract for the plant for 2019-20.

The fourth unit of the plant is expected to remain running this winter, having secured an emergency contract from National Grid.
SSE said it could not rule out compulsory redundancies among the staff at the station.
Paul Smith, SSE managing director for generation, said: “The reality is that the plant at the station is aging, its method of generating electricity is being rendered out of date and it has been, and is expected, to continue to be loss-making.
“The fact it makes more sense for SSE to contemplate making a substantial payment in lieu of the capacity agreement relating to Fiddler’s Ferry in 2018/19 demonstrates just how economically challenged Fiddler’s Ferry has become.”

SSE press release

As reported by the Talkshop in November, the National Grid has only recently been in emergency measures (NISM) to ensure the lights stay on. This may now become common practice.

You have been warned. Get ready for next winter.

P.S. Just to add to the 24 carat, fur lined, ocean going cock-up, that is the UK energy policy; EDF appears to be in a panic over building Hinckley Point C. With Yet another delay.

 

Comments
  1. J Martin says:

    The sooner the politicians get their self made disaster of winter powercuts the better. Then the sooner a sensible power policy can be put in place since power generation requires significant lead time. I guess the way out of the impending power gap might be gas and diesel. But I wonder what the average householder can do to keep the lights on and stay warm. A central heating boiler that also generates electricity perhaps. Flow ?

  2. J Martin says:

    http://www.flowenergy.uk.com/meet-flow/
    Gas boiler that generates electricity. But is it a good deal though. Hard to tell.

  3. oldbrew says:

    Two of the four Fiddler’s Ferry units can burn up to 30% biomass.
    But they are still making big losses even with a subsidy contract.
    http://www.engineering-timelines.com/scripts/engineeringItem.asp?id=979

    Meanwhile, German offshore wind turbines are costing far more to maintain than expected.
    The same problem ships have – rust.
    http://notrickszone.com/2016/02/02/offshore-offshore-wind-turbine-maintenance-costs-100-times-more-expensive-than-new-turbine-itself/

  4. p.g.sharrow says:

    The death spiral is under way. Energy starvation has begun and revolution against the philosophy of MORE will begin in it’s birthplace. The Liberal Progressive Socialists have run out of other people’s money to support their dream society…pg

  5. p.g.sharrow says:

    @oldbrew; My experience with wind turbine farms on land is that maintenance cost and demands quickly exceed the value of the net energy generated. At sea! 8-( OMG These pencil pushers must have NEVER worked at sea!
    The quickest way to stop the hemorrhage is to scrap them. The longer they are operated the greater the cost to everyone.
    Sooner or later they will have to be removed and scraped or in 25 years the sea will consume them…pg

  6. tallbloke says:

    This is true PG. Salt water, steel and electricity are a recipe for rapid rust.

    Chickens coming home to roost better be careful the bit they land on doesn’t give way.

    JM: No use going for the Flow CHP boiler, they rely on a grid connection for ignition, and only generate electricity while the heating is running.

    Simple is best. A couple of solar panels charging a few lorry batteries. 24V DC lighting circuit running lorry equipment. A generator set. A woodburner, a chainsaw and a sharp axe. Box of candles. Paraffin pressure lantern. Pitchfork for dealing with useless government.

  7. oldbrew says:

    It’s the 21st century but we have to keep calm and

  8. ivan says:

    All of this caused by UK civil servants who have expended their utmost to ensure that there is an adequate gold plating on the EU directive regarding shutting down coal fired power stations, while in Germany they are building them to be fired with brown coal.

    Why do we, the public, put up with such stupidity and not take the MPs to task for letting such things happen – sorry, I forgot, there is only one MP that has a decent education at the moment.

  9. Bless you Brits!

    Please hurry up and have your disaster so that we in the USA won’t have to (except for California).

  10. Fanakapan says:

    With potentially 2 more years of low gas and oil prices which will force the EnergyCartel to address prices to the consumer, they need to move now to get the .gov by the testicles in order to gain tasty subsidy for building the capital equipment their business depends on.

    Which will show the privatisation of the Thatcher era to have been in most cases, a total Crock, and just what its detractors at the time claimed, merely a transfer of national wealth into private pockets🙂

  11. tallbloke says:

    Fanakapan: I’m still annoyed that the Thatcher govt stole assets which I already owned part of and offered to sell them back to me in the form of shares. However, a lot of the blame for the lack of investment in new reliable generation plant over the last decade is to be laid squarely at the foot of the Edstone, who’s owner steered the Climate Change Act through parliament, and the 646 numpties who voted for it. And we’re still being told coal will be phased out by 2025.

    I fully expect to be made junior energy minister under the UKIP government in 2020, when I will batter the ‘Eds together until sufficient sparks fly to set fire to DECC and it’s lobbyists in a bonfire of EU funded NGO’s which will keep us warm while we get fracking. Problem is, the lead time on ordering new copper wound generator sets is longer than the lifetime of the parliament, so which party is going to front the money and let their replacements take the credit?

  12. Yes, the Carbon (dioxide) tax is stupid but I do not agree with other comments. I am sure if they bought coal from South Africa or Australia the power station would be viable. Back around 1985 in Tatcher’s days a large UK organisation was offered coal for $US50/ton alongside the wharf but instead they did a deal (much praised by the government) with the National Coal Board to get a big reduction on the price of delivered coal from something like 110 pounds down to 95 pounds. That company no longer exists taken over by European interests. Everyone should know socialism does not work. But when large companies pander to the establishment, play political games and pander to the unions then that is a failure also. Power stations can now be run with practically no manning. There is no excuse for letting unions (or socialistic greens and labour) operate and run a public utility. That will only lead to inefficient operation, breakdown, higher costs and unreliable supply and eventual failure.

  13. p.g.sharrow says:

    It would appear that after 150 years of experience one should be able to create a new electrical power supply system that avoids the pitfalls of all the previous systems. The one good thing is that the socialists have so wreaked things with their dreams that a rebuild will be necessary, patches on patches have resulted in the coming crash.
    I have puzzled out a solution but wonder if it is time to write it up and promote it…pg

  14. Stephen Richards says:

    Europe have begun pricing out fossil fuels. It will happen no matter what. Taxes are being raised and additional ones applied to the use of FF. Domestic boilers, diesel vehicles and power stations will all be paying much higher taxes by 2020

  15. […] 1000MW needs to be found from somewhere else. It’s making for a long list: Fiddler’s Ferry (reported here on February 4th) Longannet, Ferrybridge and Eggborough. 150 jobs are also at […]

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