Trafford power station reneges on capacity agreement

Trafford power station has reneged on its capacity agreement after failing to meet its financial commitment milestone, despite a three-month extension.

The 1.9GW project in Greater Manchester is one of only three new combined cycle gas turbine (CCGT) plants to secure capacity market contracts to date, and is also by far the largest.

 “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 would be completed in the time required”, developer Carlton Power said in a statement.

The firm has invested “significant resources” into completing the development of the plant and would be ready to start construction in January 2017 if it could tie down financing. It said investors had “consistently commended the Trafford project in terms of construction readiness and technical capability” but remained concerned by uncertainty over power prices.

“It has been acknowledged by the government and others that new high-efficiency CCGT plants are essential for the UK market in order to achieve the aims of security of energy supply and low cost of energy with the smallest possible environmental impact”, the statement added. 

“However, it has become increasingly apparent that the current arrangements for supporting the development of new generation capacity do not give sufficient comfort for this to be brought forward without substantial and unacceptable risk to investors.”

Despite the decision, Carlton Power said it would continue to develop Trafford power station and its other CCGT project at Thorpe Marsh near Doncaster.

The firm was given a three-month reprieve in July after it was issued a termination notice for failing to meet its final commitment milestone for delivery in 2020/21. The termination date for the contract was pushed back from 26 September to 19 December.