Decc considers cost of keeping coal power stations open

Upgrading a 1GW coal power station to keep it open will cost about £130 million, according to research commissioned by the Department of Energy and Climate Change.

Coal power generators must decide in the next 18 months whether to invest to meet new European emissions standards or accept limited running hours and close by 2023. Some 9GW worth of UK power stations have been flagged for early closure but that could be reversed if the economics stack up to keep them open.

Analysis by engineering consultancy Parsons Brinckerhoff suggests the capital cost of installing the necessary pollution abatement kit will be between £100 million and £200 million for a 1GW plant. There will also be fixed operating costs of £1.3 million a year and variable costs of £0.35/MWh.

As well as cleaning up nitrous oxides (NOx) to meet the Industrial Emissions Directive, generators face various costs to maintain and replace aging parts. With the exception of Drax, all UK coal plants are more than 40 years old.

Generators must consider whether they will be able to run enough hours to repay the investment. Carbon emissions regulations are expected to tighten, limiting the running hours of coal plant.

Parsons Brinckerhoff also assessed how many gas-fired power stations could feasibly be built each year. Taking into account constraints on available sites, the consent process, design, construction and the global gas turbine market, the consultants concluded up to 6GW of combined cycle gas turbines (CCGTs) could be built a year.