Power station begins closure consultation

Eggborough Power Station supplies around four per cent of the UK's electricity

The owners of Eggborough Power Station have said it will stop generating power in March 2016, subject to consultations with staff and "government bodies".

The 53-year-old coal-fired power station, near Selby, North Yorkshire, employs around 240 people.

The company said it required additional funding of £200m over the next three years to continue generating power.

It said it could not rule out some redundancies, though some roles might be required to support decommissioning.

Neil O'Hara, chief executive of Eggborough Power Ltd, said the company was facing an unsustainable financial position due to a combination of market and regulatory conditions, including falling power prices.

He said: "We intend to conduct a thorough consultation process with our employees and their representatives while we continue to consider all options available to us, including seeking to engage with government bodies."

He added the decision had not been taken lightly, given the station's "proud history and dedicated workforce".

Unite, the union which represents a number of employees at Eggborough, said it would have talks with the company next week.

'Bleak day'

Kelvin Mawer, regional officer with Unite, said: "It came out of the blue this morning to the whole workforce.

"I think in the climate it is a fait accompli. Unite is the major union at the site and and we will try to fight this one if there is a possibility it can be saved.

"If there isn't we have to try to mitigate the losses and ease the pain for these people."

Analysis

Danni Hewson, Business Correspondent BBC Yorkshire

Drive along the M62 from Leeds to Goole and you can't fail to notice the trail of power stations; Ferrybridge, Eggborough, Drax - decades of energy production, fired in the main by coal.

It was perhaps inevitable that Eggborough would come to this point.

Eighteen months ago it generated headlines after it failed in its bid to get government help to begin conversion to biomass.

Closure was discussed but then dismissed and in November a new buyer stepped in.

But when Ferrybridge announced its closure earlier this year many wondered how Eggborough's new owners could surf the rising cost of burning coal. Today they announced they cannot.

By March this little strip of Yorkshire could see the loss of two its three burning giants - another indication that in this country at least the age of coal is past.

Nigel Adams, the Conservative MP for Selby and Ainsty, said it was "devastating" news that he had been working to avoid.

"It is a very bleak, dark day for Eggborough," he said.

"They need £200m to operate over the next three years and the carbon tax over the next three years is £250m. You don't have to be a super economist to know those figures don't stack up.

"I have got meetings with energy ministers next week. If there is a slim chance that the power station in its current form can be saved then we will make sure we save it."

Around 240 workers are employed at the 53-year-old power station

The company said the 2,000 MW power station has the potential to power two million homes - around 4% of UK properties.

The Department of Energy and Climate Change said the UK's energy security would be unaffected by the closure.

A spokesperson said: "The government takes security of supply very seriously and has worked with National Grid to put in place an effective plan which is flexible enough to adapt to individual plant closures."

The station had previously failed in its attempts to gain support from government to convert to biomass.