It has recently been confirmed that one of the country’s largest coal-fired power stations, Eggborough will close later this year. The site, located near Selby, North Yorkshire has been operational for over 50 years and has at times produced over 5% of UK electricity, powering 2 million homes. It may therefore come as a surprise to some that such a prominent provider of energy could be allowed to cease production.
The plants owners, Eggborough Power Limited offered some clarity on this, attributing the closure as the end of a five year financial struggle to keep the plant open and the outcome a reflection of the government’s fervent campaign to bring all coal-fired power generation to an end by 2025.
The company’s managing director, Mr Adam Booth added “With the age of the plant and the current government’s policy Eggborough has been under threat of closure for the past few years”.
This policy is perhaps best illustrated by Home Secretary Amber Rudd, who stated “Frankly it cannot be satisfactory for an advanced economy like the UK to be relying on polluting, carbon-intensive 50-year-old-coal first power stations”. She went further, making clear that she would prefer more gas fired stations to be built, describing the use of “Polluting coal” as “Perverse”.
I have explained and briefly illustrated how the government has encouraged a shift away from coal powered energy production. This raises the question, how did the plant survive for so long in this market?
The answer to this is simple and one that isn’t uncommon. They sought and were successful in obtaining short-term contracts in the capacity market, where they were paid sums to remain available to provide electricity in the event of energy shortages.
This allowed the plant to remain operational for some years, though only in the short-term as they have failed to secure the necessary contracts to enable them to operate through 2018-2019. And so with this failure comes the plants closure, which is scheduled for September 2018, once the last capacity contracts are fulfilled.
Despite the impending closure credit must be given to Eggborough Power Limited, who exceeded all expectations in keeping the plant open so long. It was the original intention for the site to remain operational until 1995. However, the owners not only successfully navigated turbulent markets, but they did so with an ageing plant for over 50 years.
The plant is closing. So what is to become of the site and of the workers?
At present there is some uncertainty surrounding this and therefore there isn’t a definitive answer, but rather two possible eventualities.
The first is that the plant will close as scheduled, taking with it between 150 to 300 jobs. Mr Booth did however offer assurances that a number of these roles would transfer to assisting with the decommissioning and demolition process. This would be a short-term solution however.
The second and preferred outcome is that the plant be demolished and that a new 2,500 megawatt gas-fired power station be erected in its place. At the time of writing Eggborough Power Limited have lodged a planning application to develop the site as suggested. However, the process is long winded and they await a response to date. A decision is expected shortly.
Lastly, with Eggborough’s closure what is left of the UK coal plant market?
There are six coal-fired power plants remaining in England and Wales. These are: Nottinghamshire, Lincolnshire, Vale of Glamorgan, Newport, Drax and Ratcliffe-on-Soar. But what is to become of these?
At present they are to continue operating as normal. However, many experts including Dr Jonathan Marshall, an energy analyst at the Energy and Climate Intelligence Unit have predicted additional closures. He went further, describing coal fired energy production in the UK as being in “Freefall”.
It therefore seems highly unlikely that there will be any active coal plants by 2025. The last of these stations will have two options, to cease operations completely or to adapt in a similar way as Eggborough has, shifting to less environmentally harmful ways of generating electricity.
For most the preferred avenue will be the latter. However, it is important to note that though Amber Rudd has encouraged a transition to gas powered stations this itself isn’t without its critics. One such critic is Ms Dominique Doyle of Client Earth, who explained that it would be crazy to swap one fossil fuel for another, adding “Curtains for coal must not be a free pass to switch these to giant gas units”.
With that being said it is still the aim of Eggborough to make this transition to gas power production. As already highlighted the application is at the very early stages and at the time of writing we await the outcome. However, Eggborough Power remain confident and hope that once up and running the station will fill the void left by the coal plant in providing electricity for around 2 million UK homes.
Jordans Solicitors has a department working with ex coal miners looking into their Vibration White Finger claims as it has come to light that many miners missed out on £1000’s. If you’re an ex miner and think you may have a claim, contact a member of our VWF team free on 03303 001103 or request a call back.