Power plants paid £77m to be on winter stand-by

TWO coal power plants, one in North Yorkshire and the other in Cheshire, are being paid a combined £77m to be on standby this winter as part of National Grid’s plan to minimise the risk of electricity blackouts.

Of the eight firms to win supplemental balancing reserve (SBR) contracts, under which power plants are paid to be on standby for four months, ready to start up if needed, is the Eggborough coal power plant in North Yorkshire, which has agreed to provide up to 681MW of power, the Guardian reported.

It is understood that Eggborough will be paid £60m to be on standby, a sum which is the equivalent of more than 10% of the plant’s revenue during its last 18-month reporting period.

A coal plant owned by the power firm SSE at Fiddler’s Ferry in Cheshire is understood to have been paid £17m for the same service, making 422MW available.

The size of the UK’s capacity margin  will be revealed on Friday when National Grid publishes its winter outlook.

The margin is understood to be higher than the 5.5% predicted by National Grid earlier this year. That was itself an improvement on last year’s “tight but manageable” 5.1%.

Both plants will earn more if they are told to move to “hot standby”, an advanced state of readiness, and they will also be paid during startup and if they are asked to generate power.