A SECOND Yorkshire power station looks set to close next year prompting calls for Government policy to change or run a serious risk of power shortages and price spikes.
Eggborough power station, near Selby, could close with the loss of 240 jobs next March, the same month as Ferrybridge power station, near Castleford, after saying it needed £200m to remain financially viable over the next three years.
The Longannet plant in Fife, Scotland, will also close in March, after being pronounced “uneconomic.” Together the three coal-fired power stations represent around eight to 10 per cent of the country’s reliable sources of electricity.
The news is the latest blow for the area. Hatfield Colliery, near Doncaster, closed in mid-July. Kellingley Colliery, less than 10 miles from Eggborough, will shut just before Christmas.
Bosses at Eggborough said the fall in power price, driven by the decline in commodity prices, combined with continued high carbon tax, meant Eggborough, was “unable to cover its future operating costs.” The tax would have cost them £250m over three years.
Research fellow from the Centre for Policy Studies Tony Lodge said the Coalition’s carbon tax, introduced in 2013, which placed a minimum tax on the carbon dioxide emissions from power stations, had “killed” Eggborough, as well as Ferrybridge and Longannet.
The tax - the highest in Europe - allowed the Treasury to raise over £2bn extra revenue but had already cost hundreds of jobs, increased prices and threatened energy security. He added: “The policies of the Department for Energy and Climate Change are running a serious risk of power shortages and price spikes. If the Government had not been greedy and set the tax lower they could have had the best of both worlds, consistent revenues through the 2020s and power stations remaining on.”
Goole Tory MP Andrew Percy lamented a “crazy situation” where European regulations, combined with a domestic push towards renewables “whatever the cost are effectively legislating out the cheapest form of generation and the means by which thousands of people in Yorkshire make their living.”
He added: “Both (renewables and fossil fuel) are important but I do seriously worry that we have taken coal out of the equation far too early.”
Two years ago Eggborough was looking to convert its entire 2000MW output to burning wood-based biomass, but the Government would not back the scheme.
It was acquired by Czech Republic based EPH last November. MP for Selby and Ainsty Nigel Adams said he had worked with directors for over two years to find a solution but “unfortunately the Government appear to have been obsessed with backing inefficient wind farms and not putting more support into reliable dispatchable energy like biomass.”
He added: “Any Government that is in power when the lights start going out is in serious trouble and I hope whoever is running the National Grid knows what they are doing in terms of capacity.”
Chief executive of Eggborough power station Neil O’Hara said they were “deeply saddened at the prospect of potentially ceasing generation at Eggborough Power Station and believe that Eggborough Power could have a significant part to play in ensuring security of supply in the UK electricity market.”
A spokesman for DECC said the public could be assured energy security would be “unaffected” and their top priority was ensuring “secure, affordable energy supplies.” He 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.”