Coal, Combined Cycle, Gas

UK power bosses rule out new CCGTs

24 March 2004 – The UK is not likely to see the construction of any new combined cycle gas turbines (CCGT) power station in the short term, according to the bosses of five major power companies operating in the UK. The industry leaders from Powergen, Scottish & Southern Energy, EDF Energy, Scottish Power and RWE Innogy, made their comments at a London conference yesterday arranged by the Business Council for Sustainable Energy UK.

Paul Golby, chief executive of Powergen UK said that the industry had had its fingers burnt and that to suggest to his board that they build a new UK CCGT, “would be career limiting.” Ian Marchant, the chief executive of Scottish & Southern Energy said that at present, much of the UK’s generating capacity was not in the hands of long-term players with banks holding significant stakes. This created uncertainty and in his view, it would be another 12-18 months before he would be looking to make any decision about new build.

The chairman and chief executive of EDF Energy, Vincent de Rivaz, said that he would not recommend building any new CCGT facilities in the UK at this time. “We are however investing in Flue Gas Desulphurisation technology in our existing plants.” He said.

Charles Berry, executive director of Scottish Power, said that there was too much uncertainty in the market to encourage investment. “Similar markets to the one created by NETA see cycles, often over seven years, with a two year peak. The question is, how will a UK government react to a price spike when it comes?” Juergen Dennersmann, executive director of RWE Innogy, agreed that the level of uncertainty was too great to contemplate new UK gas fired generation, although he said that it is generally accepted that new capacity will be needed.