The Tilbury B power station is to close, reports the FT (see also the more in-depth coverage at the Guardian):
Tilbury B was scheduled to close under an EU environmental measure known as the Large Combustion Plant Directive (LCPD). Under the legislation, Tilbury was allocated a quota of 20,000 hours of operation from January 1, 2008. In 2011, RWE decided to switch it to biomass for the remainder of its LCPD hours, due to end at midnight on Tuesday.
RWE had hoped to convert the plant from coal to biomass, which would have given it an extra 10-12 years of life. But after the Department of Energy and Climate Change decided the project was ineligible for its low-carbon energy subsidy, the “contract for difference”, RWE said the plan was “no longer economically viable”.
This is quite interesting, in an "Oh my god we're all going to die" kind of way. The latest Ofgem assessment of supply security is here, and notes that the sitation is not good:
Since last year, the outlook for the supply side has deteriorated and industry has announced the withdrawal of more than 2GW of installed generation capacity in the near future.Further withdrawals are still likely. Uncertainty around policy and future prices continues to limit investment in conventional generation and no new plant is expected before 2016. We estimate that around 1GW of new gas plant will come online before the end of the decade and the installed capacity of wind power will more than double over the same period.
The margin of capacity over demand is projected to fall to 4% or so, under Ofgem's so-called reference scenario. This is pretty scary, but when you realise that the reference scenario assumes significant drops in demand, the document starts to look more like propaganda than a truthful assessment of risk, particularly if the economy is really returning to growth. Under the high-growth scenario, margins fall to approximately zero.
A big power plant like Tilbury could meet 1 or 2% of demand. It's not clear to me whether Ofgem were banking on Tilbury managing to convert to biomass or not in their assessment of capacity margin. If they were, then that margin could be wiped out completely.