SSE is to invest £350 million in a new 840MW combined-cycle gas turbine (CCGT) power station at Keadby in North Lincolnshire.

The firm says it plans to enter the plant into the next four-year-ahead (T-4) capacity market auction, having failed to secure an agreement for the project in either of the previous two rounds. Work is scheduled to begin shortly.

The power station forms part of a £6 billion investment programme for the UK and Ireland which SSE announced alongside its financial results for 2017/18. The company expects to spend £4 billion of the total upgrading electricity networks and developing new sources of renewable energy in the UK over the next five years.

After halving the carbon intensity of the electricity which it generates between 2006 and March 2017, SSE has committed to making a further 50 per cent reduction between now and 2030. It says the new CCGT is consistent with this target and will help to lower emissions in the UK by replacing more carbon intensive coal and gas generation.

The plant will be built alongside SSE’s existing 735MW CCGT at Keadby and will feature a “first-of-a-kind” H-class turbine supplied by Siemens. Once complete, the firm says it will be the most fuel-efficient CCGT connected to the power grid, converting 63 per cent of the heat produced from burning gas into electricity.

“SSE is very pleased to have this unique opportunity now to be partner with Siemens to build a new state-of-the-art gas-fired power station at Keadby 2,” said the company’s wholesale director Martin Pibworth.

“Its highly efficient technology, not previously seen in the UK, will provide firm, reliable power from the early 2020s at half the carbon emissions of the coal generation it is replacing.

“New CCGT complements SSE’s ambitions to develop more offshore and onshore wind as CCGTs remain well-placed to provide flexible, grid-scale back up to complement the large volumes of renewables the UK needs to meet its low carbon targets.”

Willi Meixner, chief executive of the power and gas division at Siemens, said: “Siemens is delighted to be selected by SSE to work in partnership in the deployment of our new 50hz 9000HL gas turbine technology which will allow SSE to compete in the UK energy market.”

Energy and clean growth minister Claire Perry welcomed the announcement of the £6 billion investment programme, describing it as “a testament to the success of our power sector in attracting international investment and delivering a diverse and increasingly lower carbon mix.”

Only three CCGT projects have secured new build agreements over the four T-4 capacity auctions to have taken place since 2014: the Trafford project, which reneged on its contract after it failed to obtain financing; the Carrington plant, which was already nearing completion when it secured an agreement; and Centrica’s King’s Lynn project, which is a repowering of an existing gas plant.

Ten CCGT projects with a combined capacity of more than 11GW missed out on contracts in the latest auction in February after being crowded out by, among other things, three new build interconnectors.

Earlier this month, WWF and Sandbag claimed in a new report that the UK would be unlikely to require any new baseload gas generation to fill the capacity gap left by the planned closure of coal power stations. They predicted the Carrington plant would be “the last large gas plant” to be built in the country.

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