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Fiddler’s Ferry decision highlights UK supply gap

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World Coal,

The decision by the UK National Grid to offer a 12 month contract to utility, SSE, to keep the Fiddler’s Ferry coal-fired power plant operating highlights the significant worry over the UK’s power supply, according to Alan Richards, Head of Risk Management and Research at Utilyx.

“National Grid’s decision to extend support to SSE to keep Fiddlers Ferry open suggests there are very real concerns about the UK’s security of power supply for next winter,” Richards said in a statement.

“Even with this announcement the margins are still very tight and we could be exposed to greater market volatility and spikes in the wholesale price. By 2017, we will have lost 60% of the coal capacity we had in 2010 – and this is not being replaced quickly enough. The government needs to provide better incentives and greater certainty around their energy policy to attract investment in new supply.”

The one-year contract will start on 1 April and cover one of three available units at the site. Beyond this, the future of the site remains in doubt, however, said Martin Pibworth, Managing Director – Wholesale, at SSE.

“Challenging economic and environmental conditions for coal as the UK cleans its electricity mix mean that the longer-term future of the site remains uncertain,” Pibworth said.

Increasingly stringent emissions regulation and a high carbon tax in the UK have taken a significant toll on the UK’s coal-fired power industry. On 31 March, SSE announced the closure of its Ferrybridge C coal-fired plant after 50 years of operation.

According to recent figures from the UK’s Department of Energy and Climate Change (DECC), coal generated just 19.9% of UK electricity in 4Q15 compared to 30.9% in 4Q14.

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