Two of the three power plants operated by Calon Energy have been put into a “dormant state” by administrators KPMG.
The restructuring firm, which was appointed to Calon’s holding company at the end of June, said both the Severn Power Station in Newport and Sutton Bridge in Lincolnshire, were not generating sufficient returns to continue trading effectively.
The two Combined Cycle Gas Turbine (CCGT) sites, which each have a capacity of 850MW, have been placed in a “safe and dormant state of managed preservation”, while KPMG attempts to recover costs for creditors.
The sites employ 68 staff between them.
KPMG said the operating company for 582MW Calon’s Baglan Bay Power Station in Port Talbot was not subject to administration appointments “at this time” and remains under the control of its directors.
Jim Tucker, restructuring partner at KPMG and joint administrator, said: “Following the appointment of administrators over Calon Energy Limited, the group’s Topco, on 24 June, CEL’s administrators have worked closely with the senior management team and key stakeholders to consider a number of options in relation to CEL’s operating subsidiaries.
“The recent and ongoing challenges facing the UK power market mean that these power stations are currently not generating sufficient returns to continue trading effectively. It has therefore been determined that the power plants will be placed into a safe and dormant state of managed preservation to provide more time to explore all options in order to recover value for the group’s creditors.”
Calon also owns a former power plant site in Willington, Derbyshire, where it was planning to construct 2.4GW CCGT / Open Cycle Gas Turbine facility.