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SSE plans to return its 735MW Keadby gas-fired power plant to the market by December this year in order to contribute to the UK’s dwindling supply margins over the colder months.
The Lincolnshire based power plant will return to service within three weeks to start commercial operations in early December after months of work from the Scottish utility to bring the plant out of ‘deep mothballing’.
The decision comes just days after National Grid confirmed concerns that the UK power system will be the tightest it has been for the last eight years, and may need to rely on reserve supply to avoid blackouts.
“Government and National Grid have more capacity with which to power people’s homes this winter,” said SSE managing director of generation Paul Smith, adding that the station has undergone extensive upgrades meaning it can operate with improved flexibility in the market.
SSE is poised to shut down its 1GW Ferrybridge and 0.5GW Fiddler’s Ferry coal-fired assets in less than six months but has secured a contract for its Keadby plant through last year’s capacity auction to deliver power in winter 2018/19.
Keadby was removed from the market in March 2013 due to adverse market conditions which in recent years have sapped generation profits for Europe’s biggest utilities.
SSE says the decision to return the plant reflects the wider ‘coal to gas switch’ currently shaping the electricity market following changing policies and market conditions.
In August this year Utility Week reported that UK generators could see their profits from gas-fired power plants for the coming winter reach twice as high as market conditions suggested at the end of last year.
Price data from market experts at Icis shows that power generated in winter 2015 from gas plants was valued at an average of £2.41/MWh in October 2014 when the market first began trading significant volumes of both power and gas for the coming season. But the August average for this winter’s gas-fired power profits climbed by more than 86 per cent to over £4.50/MWh.
The station will begin its return to service from 9 November, with full commercial availability expected by mid-December.
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