The Trafford power project has failed to meet its Financial Commitment Milestone for receiving a Capacity Market contract, developer Carlton Power has informed the Department of Business, Energy & Industrial Strategy (BEIS) and has given up its agreement. The company had already been given an extension to allow more time for it to find backers.
The company said, “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 (1.93GW CCGT) would be completed in the time required.
“Since securing the Capacity Market agreements in December 2014, we have invested significant resources to complete the development of Trafford with our chosen EPC Contractor GE and we had reached the stage that we would be ready to start Trafford’s construction in January 2017 which would deliver much needed low-cost electricity in early 2020.”
Claiming that the plant would have made a return of 16%, the company added that investors, “remain very concerned about the uncertainty of merchant revenues for new CCGT projects,” and said that despite government statements that new CCGTs were required, “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.”
Carlton said it would continue to pursue the Trafford plant and another at Thorpe Marsh, and said it would discuss with BEIS “ways in which much needed overseas investment can be encouraged to participate in this essential regeneration of reliable, low cost GGCT capacity.”
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