The UK government has withdrawn a subsidy for an £800m gas-fired power plant project in Manchester, its developers said on Tuesday, following its failure to secure investment needed to build the plant.

The facility operator’s difficulties in making the project economical had been signalled late last year, and it was hoped at this juncture that investment would have been secured under the government’s capacity market scheme

Carlton Power’s Trafford gas-fired power station was the only new large-scale gas plant to secure financing under the scheme, designed to secure the country’s electricity supplies.
Carlton Power
Carlton Power missed certain deadlines for obtaining investment for the project. A company spokesman said discussions were still ongoing with potential investors.

The spokesman also said discussions were still taking place with the government and the electricity market reform delivery body to see if the deadline could be extended.

The contract secured by Carlton Power for the Trafford plant was worth around £30m a year for 15 years and would be paid on top of revenues generated from selling electricity.

A drop in electricity demand and prices in Britain have meant developers such as Carlton Power have struggled to find investors for new power plant projects.

Once completed, the plant would have the capacity to provide power to more than 2 million homes.

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