Coal plant loses out in UK capacity auction

7 February 2018

Czech firm EPH bought Eggborough in 2014 but said in a statement that the power plant would not be economic to run without the support of a contract. Its closure will leave the UK with just seven coal-fired power plants: Drax, Cottam, West Burton, Fiddlers Ferry, Aberthaw, Uskmouth, and Ratcliffe-on-Soar.

The results of the UK’s latest capacity market auction – covering contracts for delivery next winter – were published in early February. It achieved a clearing price of £6/kW, the lowest of any auction to date.

“It is with regret that Eggborough Power Limited (EPL) announces that Eggborough Power Station was not successful in this week’s capacity market auction for the period 2018-19,” Eggborough Power said. “EPL will continue to meet its obligations under the current capacity market contract, which runs through to the end of September 2018, but without a contract for future years it will cease to be economically viable to continue operations at the station.”

The low price of the auction was driven by bids from cheap gas units, which secured around three-quarters of the contracts, as well as demand-side reponse systems. Battery storage systems won around 95 MW of capacity.

Jonathan Marshall, Energy Analyst at the Energy and Climate Intelligence Unit (ECIU) said that the results of the auction indicated that coal plant was losing out to distributed generation systems. “This result follows the news that coal generation in January 2018 – typically one of the most coal-intensive months of the year – is down by more that two-thirds compared to just one year ago,” said Marshall.

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