E.ON is planning to shut down a combined cycle gas turbine power plant at Stoke-on-Trent in the English Midlands and scale back operations at Castleford, Sandbach and Thornhill in the north of the country.
The news comes fresh on the heels of a similar announcement by fellow Germany-based utility RWE, (FWB: RWE) who disclosed that they are considering the closure of seven power plants in the UK over the next decade.
The decision was taken due to “lack of viable commercial options for the plant”, according to E.ON (FWB: EOAN).
E.ON also recently closed the Kingsnorth coal-burning power station in Kent.
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 US – where it has become surplus to requirements thanks to the country’s shale gas boom.
“Over the last five years, E.ON has invested £6bn in the UK’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 told the Guardian.
E.ON, like 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 closures have increased fears that the UK is vulnerable to energy blackouts over the next ten years until such time as new nuclear power starts to come online.
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