Carlton Fails to Find CCGT Investors
Carlton Power has failed to drum up enough investment for its planned 1.93-GW Trafford gas-fired power plant and forfeited a guaranteed future payment (capacity contract) from the government. Such capacity payments are made when the grid needs to call on extra generation to match demand.
The developer secured such a capacity contract from the government in 2014. However, this July the government set a deadline of December 19 for it to finalise £1.2bn ($1.5bn) of investment in the combined-cycle gas turbine (CCGT) project near Manchester – or else forfeit that capacity contract.
Carlton Power on December 20 issued a statement saying it had informed the government that it was “unable to demonstrate the financial commitment milestone” required by it.
“This decision has been taken with regret but we understand that the government needs to have a clear picture of what generation capacity is going to be physically available in the future and we did not have sufficient certainty that our Trafford combined-cycle gas turbine project (1.93-GW CCGT) would be completed in the time required.”
Carlton power subsidiary Trafford Power would have developed the 1.93 GW (Credit: Carlton Power)
Carlton said it had selected a contractor, GE, and had reached the stage where it would have been ready to start Trafford’s construction in January 2017 and deliver power early 2020, but admitted that investors “remain very concerned about the uncertainty of merchant revenues for new CCGT projects.”
Despite this decision, Carlton said it would “continue to pursue our development of Trafford and our power project at Thorpe Marsh, near Doncaster” and looked forward to discussing with the government way to attract overseas investment into new CCGT capacity.
The UK's latest round of power plant capacity contract awards, for 2020-21, were announced on December 9.
In a separate announcement, the European Commission said December 20 it had approved, under EU state aid rules, German plans to put in place for four years a reserve to ensure sufficient electricity capacity in southern Germany (the Network Reserve).
Mark Smedley