ESO ‘still in talks’ with Drax about coal units returning for winter

The Electricity System Operator (ESO) has claimed it is “still in talks” with Drax about making its last two coal units available over the coming winter, despite the latter previously ruling this out as a possibility.

However, Drax has denied being in negotiations with the ESO, saying it has already begun decommissioning the units. Utility Week understands significant work would now be required to bring the units back online and they would not be able to provide as much capacity as before.

Speaking to Utility Week ahead of the release on Thursday (15 June) of its early view of the Winter Outlook for 2023/24, the ESO’s director of corporate affairs, Jake Rigg, said the last two coal units at EDF’s West Burton A plant will be unavailable as previously expected.

All four units were due to close in autumn last year after fulfilling their last Capacity Market contracts. However, along with another coal unit at Uniper’s Ratcliffe-on-Soar power station, the ESO contracted them to remain available until the end of March 2023 as one of several contingency measures to address concerns over the security of gas supplies.

The reserve was only used once on 7 March when the ESO instructed the two 400MW units at West Burton A to supply power to the grid to help meet the evening peak in demand.

The following week, the ESO revealed it had been instructed by the government to begin negotiations with Drax and EDF to keep their coal units available for the coming winter as well. However, both companies said this would be impossible as they intended to begin decommissioning the units once their contracts finished at the end of the month.

In April, Drax confirmed it ceased coal generation at its namesake power station in the North Yorkshire nearly half a century after it began.

Rigg said although he “can’t comment on their nature,” the ESO is in fact “still in talks” with Drax about keeping its coal units on standby next winter.

In contrast, a spokesperson for Drax said: “As we announced in April, we have closed our coal units at Drax and have started the decommissioning process. Since then, we have had various discussions with government and ESO, but we are not in negotiations to extend their availability into the coming winter.”

The coal unit at Uniper’s Ratcliffe-on-Soar plant is expected to remain available as a normal market participant after securing a Capacity Market contract in the latest year-ahead auction in February.

The ESO is currently forecasting a de-rated supply margin for winter 2023/24 of 4.8GW – or 8%. It expects 65.1GW of de-rated generation capacity to be available to meet peak average cold spell demand, including operating reserve, of 60.3GW.

Rigg said this margin is “slightly above last winter and broadly in line with previous winters.” He said the margin reflects the ESO’s base case scenario, “which assumes that gas would be available for the gas generating plants so they can operate in line with their Capacity Market commitments.”

It does not fully account for the risks of gas supply shortages resulting from Russia’s invasion of Ukraine although these are reflected to an extent in the de-rating factors for interconnectors with Europe.

Rigg said it is “way too early to say how exactly those things may or may not map out”. He said this issue will be explored in more depth in the full Winter Outlook published in the autumn but added: “I think it’s fair to say the risks around that as broadly in line with where they were last winter.”

“Whilst the picture is positive in terms of the base case, that risk still hasn’t gone away,” he said.

Alongside the early view of the Winter Outlook, the ESO is also issuing a consultation of the Demand Flexibility Service, which was one the other contingency measure introduced by the body last year to address concerns over gas supplies. It was recently confirmed to be returning for the coming winter.

Rigg said: “One of the things that we are flagging is that we really want to encourage industrial and commercial users of electricity to participate in it this winter.”