The Department of Energy and Climate Change (DECC) has insisted there is no danger of the country’s lights going out after the Czech owners of one of Britain’s biggest power stations announced its closure.
Officials tried to reassure businesses and the public after they learned they would lose the 2,000 megawatts from the Eggborough plant in North Yorkshire at a time when spare power capacity at peak times is set to reach zero.
Eggborough’s owners, Energetický a Průmyslový Holding (EPH), had previously said it would close in six months’ time. The company also said there would be 240 redundancies at the coal-burning facility, which provides 4% of the UK’s electricity, or enough power for two million homes.
“This is obviously disappointing news for everyone connected with Eggborough, but people can be assured that energy security will be unaffected,” a DECC spokesman said.
“The government takes security of supply very seriously and has worked with National Grid to put in place an effective plan which is flexible enough to adapt to individual plant closures,” he said.
EPH said it was forced to act because the 51-year-old plant would need £200m of additional funding to keep firing for another three years. It said its application for government subsidies to keep Eggborough open had been turned down.
Neil O’Hara, the plant’s chief executive, said he was saddened at the prospect of generation coming to an end.
“Eggborough Power could have a significant part to play in ensuring security of supply in the UK electricity market, particularly while there remains great uncertainty around new-build gas-fired generation.
“We intend to conduct a thorough consultation process with our employees and their representatives while we continue to consider all options available to us, including seeking to engage with government bodies.”
In a separate move, the Treasury is being forced to defend the way it closed off parts of the climate change levy (CCL) in court. It gave the energy companies affected only 24 days’ notice.
Drax, the owner of another large, partly coal-fired power station in North Yorkshire, and the renewable power firm Infinis are seeking a judicial review of the CCL decision unveiled in George Osborne’s July statement.
Drax is generating a growing amount of energy by burning biomass pellets and estimates that the loss of CCL revenue will cut its core earnings by £30m this year and £60 million 12 months later.
CCL is a tax on UK business energy use intended to reduce carbon emissions and promote energy from renewable sources. It was implemented in 2001 and is collected from businesses by energy suppliers through their bills.
Customers were able to claim an exemption from the CCL if they bought electricity from certain renewable energy sources.
Critics have accused the government of endangering the future of renewable power.
