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UK Energy Supply Crunch Looms As Another Coal Plant Closes

 Jillian Ambrose, The Daily Telegrapg

The second major coal plant closure announced in a week could drive the UK’s risk of blackouts higher next winter

The UK is to lose another coal-fired plant from its dwindling power capacity after French firm Engie said it will shut the 1GW Rugeley power station in Staffordshire.

The energy firm, formerly known as GDF Suez, blamed a “deterioration in market conditions” for the shutdown, which could lead to 150 job losses and heighten ongoing concerns of a looming energy crisis.

“Unfortunately, market conditions for UK coal plant have deteriorated rapidly in recent years, as a result of a continued fall in power prices on the back of commodity market decline, and increases in carbon costs,” Engie said.

The UK is set to lose almost 9pc of its total generation supply within the space of a few months as coal-plant generators struggle to survive falling market prices in a greener energy system.

Less than a week ago, Big Six energy firm SSE said it will wipe 1.5GW of coal-fired power capacity from its generation fleet, despite securing a Government subsidy contract to keep its Fiddlers Ferry plant running until 2018-19.

Coal-fired power generators struggle to make any profit due to persistent weakness in the price of wholesale power. While generators are forced to sell their power for less, the rising cost of emitting carbon [dioxide] means they need to pay out more.

A spokeswoman for National Grid, the energy system operator, said the closures will have no impact in the short term, and it has already contracted generation units totaling 3.2GW to help keep the lights on next winter.

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