At the request of the UK’s Business and Energy ministry, BEIS, National Grid ESO has agreed contracts with Drax and EDF to extend the life of coal fired power plants this winter. The new winter contingency contracts will only be used as a last resort, and to ensure resilience and security of supply.
A total capacity of 1940 MW will be available from the coal fired units West Burton A (2 x 400 MW) and Drax, (2 x 570 MW). Negotiations are continuing with a third generator for a fifth coal unit.
The upfront cost is expected to be in the region of £220m to £420m, the full cost being determined by whether a fifth unit is added and how much coal will be procured.
These units will be available from 1 October 2022 until 31 March 2023, with costs recovered through the Balancing Services Use of System charge between 1 October 2022 and 31 March 2023.
The units contracted will not be available to the open market, will only be dispatched at the request of the ESO, and are only intended to be enacted when all commercial options have been exhausted within the Balancing Mechanism.
The ESO will publish a full Winter Outlook later this autumn, to help inform the electricity industry and prepare for the winter ahead.