UK cogeneration plant set to close at end of 2012

A gas powered combined heat and power plant (CHP) which supplies Celanese Acetate's Spondon factory in Derbyshire, UK is set to close at the end of the year with the potential loss of 32 jobs.

Derwent Cogeneration Limited runs the CHP plant, which generates steam that is used to make products at Celanese's nearby factory.

Cogeneration power plant

But Derwent, which is a joint venture between SSE, International Power Mitsui and Acordis Beheer, has said that it will cease operations in December after Celanese, which is closing this year, told the company it would not be extending its contract beyond 2012.

In a statement released by SSE on behalf of Derwent it said: "The market for small gas-fired generation has become increasingly challenging as gas prices rise and free carbon credits are removed. The combination of these factors means that DCL is expected to be loss-making for the foreseeable future, with no prospect for a return to profitability even in the long term."

The Derby Telegraph reports that the firm said it planned to cease commercial operations at the end of the year and sell off its assets.

Derwent Cogeneration's current power plant was constructed on the site of the former Spondon Power Station, which was built in the 1920s specifically to supply Celanese, which was then known as British Celanese.

The power station that stands there today was officially opened in 1995 by the then Energy Secretary Tim Eggar.

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