Utility E.ON (EONGY, EOAN.XE) will close one gas-fired power station and expects to reduce output at three others despite continued warnings from the U.K.'s National Grid and others that Britain faces a capacity crunch and potential blackouts, The Guardian reported Thursday.
Utility E.ON (EONGY, EOAN.XE) will close one gas-fired power station and
expects to reduce output at three others despite continued warnings from the
U.K.
's
National Grid and others that
Britain
faces
a capacity crunch and potential blackouts, The Guardian reported Thursday.
The German-owned gas and electricity provider said it planned to end power
supplies from
Stoke-on-Trent
in the
Midlands
and
scale back operations at Castleford, Sandbach and Thornhill in the north of the
country, The Guardian wrote.
E.ON recently closed the Kingsnorth coal-burning power station in
Kent
while
another big six supplier, RWE, has closed Tilbury on the
Thames
, The
Guardian said. The huge Eggborough facility in
North
Yorkshire
, owned by private equity firms, is also under
threat of closure while Centrica, the owner of British Gas, and SSE have
mothballed gas-fired stations, The Guardian said.
Power companies argue that while coal-fired stations are being hit by tougher
pollution regulations emanating from Europe, the economics of gas ones are also
being hit by a combination of factors including relatively high wholesale gas
prices when compared with cheap coal supplies exported from the U.S.--where it has
become surplus to requirements thanks to the country's shale gas boom, The
Guardian said.
"Over the last five years, E.ON has invested GBP6 billion in the U.K.'s
infrastructure, but there is no doubt that the operational environment remains
very challenging, particularly for CCGT (combined cycle gas turbine) power
stations, which in many areas are continuing to fight for survival in the
current market, providing increasing uncertainty around future generating
capacity planning," said Richard Pennells, a director at E.ON UK,
according to The Guardian.
E.ON, like German-owned RWE, is also suffering from wider financial problems in
its domestic market, which led to a prediction in November that it could be
forced to close more than 11,000 megawatts of capacity around
Europe
, The
Guardian said.
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