SSE plc has today announced it will enter into consultation with employees and stakeholders at Fiddler’s Ferry Power Station, Cheshire, on a proposal to end commercial operations at three of the plant’s four units.
Although a final decision hasn’t yet been taken, SSE’s expectation is that the three units would likely close by 1st April 2016, subject to the outcome of its consultation process.
The fourth unit will be unaffected as it has a contract to provide services to the electricity system for the winter of 2016/17.
The company has taken this difficult step due to continuing challenging economic and environmental conditions for coal as the UK moves towards a cleaner mix of electricity generation.
The ageing coal fired station has been incurring substantial losses in recent years and this is expected to continue through to 2020.
SSE made the announcement this evening after telling employees first today. The consultation with the station’s 213 employees and other stakeholders, including local politicians, is expected to be completed around the end of March 2016.
Subject to the outcome, SSE will be discussing options for future employment within the SSE group with its staff, including any potential decommissioning work at the site, with a view to avoiding any potential redundancies. If this is unavoidable enhanced terms will be discussed during the consultation process.
It will actively seek to avoid, but cannot rule out, some compulsory redundancies if an ongoing role for the units at the station cannot be identified.
Paul Smith, SSE Managing Director, Generation, said Fiddler’s Ferry power station had made a big contribution to the UK’s energy supplies for over 45 years, but the economic realities of running the ageing plant at a loss could no longer be ignored.
The regulations of the Capacity Market mean SSE will make a payment of around £33m to the Government if a decision to terminate its Transmission Entry Capacity (TEC) and cease commercial operations is taken.
Paul Smith said:
The UK has committed to ending coal-fired electricity generation by 2025 at the latest as it moves to cleaner forms of generation to meet climate change targets. SSE has committed to reduce the carbon intensity of its overall electricity generation by 50 percent between 2006 and 2020 and has a long-standing objective to move its electricity generation from coal and gas to gas and renewable sources of energy.