SSE PLC (LON:SSE) plans to completely shutter its Fiddler's Ferry coal-fired power station in Cheshire and said its gas-fired power station at Peterhead, Scotland has failed to secure a capacity market agreement in an auction for the year beginning in October 2019.
The FTSE 100 energy provider, which in March had announced the closure one 485MW operating unit at the Mersey-side power station, said it aims to close the remaining operational capacity of what is its last remaining coal-fired station by the end of next March.
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Fiddler’s Ferry, which is capable of co-firing biomass as a feedstock, has in recent years become less economically viable due to national and international policies to promote lower-carbon forms of electricity generation.
This week, the UK government confirmed it would legislate to achieve a net zero carbon emissions target by 2050, having already committed to ending unabated coal-fired electricity generation by 2025.
Fiddler's Ferry was now financially “unsustainable”, having recorded a loss of around £40mln in the last full year, as its electricity generation volumes have reduced and it has been unsuccessful in capacity market auctions.
On that note, SSE separately announced that its Peterhead gas-fired power station has failed to secure a conditional capacity market agreement for the contract year October 2019 to September 2020, according to provisional results of the replacement year-ahead Great Britain capacity market auction, which were published overnight on thursday.
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This will not impact existing operations at Peterhead, SSE said, as the power station will remain available this winter and holds a capacity market agreement for delivery the October 2021-September 2022 delivery year for 1,062MW of de-rated capacity at £8.40 per kilowatt.
SSE, which had not put forward any of its other generation assets to participate in this auction, pointed out that it had already secured approximately £57mln from the 2015 auction, covering agreements for 3,150MW of its de-rated electricity generating capacity for October 2019-September 2020 delivery year, which cleared at £18.00/kW.
“To secure the revenue arising from the capacity market, subject to state aid approval, providers of generating capacity must produce electricity when the system requires it in 2019/20; failure to do so will result in penalties being levied.”