SSE scales down UK gas-fired power plant plans

Source: Scottish and Southern Energy

Scottish and Southern Energy plc (LSS:SSE) has decided to release electricity Transmission Entry Capacity (TEC) rights relating to the site of the two-unit combined cycle gas turbine (CCGT) power station proposed for the Abernedd brownfield site in Baglan Bay in South Wales. 

Although consent was granted during February for the construction and operation of a two-unit CCGT power station of up to 870MW, SSE has released TEC rights to reduce them to 450MW, and intends to pursue the development of a single CCGT unit only. 

"We have made it clear that all of our power stations have to be able to operate economically over the medium term,” said Alistair Phillips-Davies, generation and supply director of SSE. “The market for smaller gas-fired generation has become increasingly difficult.” 

Delayed Decision on Abernedd Power Project 

An investment decision on the scaled-back Abernedd project will not be taken until next year at the earliest and will depend, amongst other things, on the emerging shape of the electricity market following the UK government's current consultation. This means that the power station, if built, will not be operational before late 2015. When SSE acquired Abernedd in May 2009, it was envisaged that a two-unit, 870MW CCGT would be developed, with the first unit becoming operational around 2013. 

"The medium term outlook is also challenging, which is why we have decided to scale back the Abernedd development to one unit and to defer the project by at least two years compared with the original timetable,” said Phillips-Davies. “Amongst other things, this will allow us to assess the likely impact of electricity market reform as it emerges over the next year and to further analyse the economics of any investment before taking a decision to go ahead with a CCGT unit.” 

"CCGT is a cleaner fossil fuel technology, which has the necessary flexibility to support security of supplies as the presence of wind energy on the electricity system increases, but the right market signals need to be there if the necessary investment decisions are to be taken." 

Fife Power Station Suspended 

SSE has also suspended commercial operations at its 120MW Fife Power Station, near Cardenden. A total of 21 employees are affected by this, who are currently in the process of being redeployed within SSE. This decision follows the decommissioning in 2009 of two open cycle gas turbines at SSE's Peterhead Power Station. The current unfavourable electricity transmission charging arrangements have also significantly impacted on the viability of power generating plant at Peterhead and Fife. 

“Fife Power Station will be loss-making this year and is forecast to remain so, particularly when the impact of the very high transmission access charges that apply in Scotland are taken into account,” Phillips-Davies added.

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