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Centrica idles gas-fired plant amid low spark spreads

12 Mar 2012, 5.59 pm GMT

Centrica idles gas-fired plant amid low spark spreads

London, 12 March (Argus) — Centrica will mothball its 340MW Kings Lynn gas-fired power plant in eastern England from 1 April as it sees no improvement in spark spreads in the medium term, the company said today. Centrica said it will continue to operate its 245MW Barry gas-fired station in Wales, which had also been earmarked for possible mothballing, as a peaking plant.

Centrica's director for power generation Sarwjit Sambhi said: “Our older, less efficient, power stations are facing very challenging economic conditions as a result of high gas input prices. As we do not expect the situation to improve in the medium term, we have had to make the difficult decision to close Kings Lynn power station.”

Centrica's move on Kings Lynn, first proposed in October, comes as rival UK utility Scottish and Southern Energy (SSE) prepares to idle its two oldest combined-cycle gas turbines in late March, also because of low spark spreads. SSE will undertake extended maintenance at its 760MW Keadby and 688MW Medway plants, which is expected to keep them off line for at least a year.

Separately, London-based generator Barking Power is idling some capacity at its 1,000MW plant. The operator said it expects the idled capacity to be unprofitable for the next couple of years, based on current gas and power price forecasts.

Centrica has permission to build 1,000MW of capacity at Kings Lynn and it will keep this option option. But a final decision depends upon improved market conditions and clarification of the government's intentions in relation to market reform, the company said. Centrica in late February repeated calls for greater clarity on the UK's planned reforms of the wholesale market, which include the introduction of a capacity market, as well as support for nuclear and other low-carbon generation.

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