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Government clears new generation plant

EIC Energy Markets Team - November 2010

The Department of Energy and Climate Change (DECC) has given its clearance for the construction of a new windfarm, and gas-fired plant. The situation highlights the Government's desire to move to a low-carbon economy, while also underlying that the UK is likely to remain reliant on gas for power generation for the near future. The strength of gas in the fuel mix was further underlined by Dong Energy announcing its first UK gas-fired plant went live on the same day.

Clearance has been given for a 56MW onshore wind farm on the Ray Estate in Northumberland and a 900MW CCGT power station in Spalding, Lincolnshire. One of the provisions for allowing the construction of the gas-fired plant is that land is made available for the construction of a Carbon Capture and Storage (CCS) facility. Recently, the Government announced that gas-fired projects could take part in the CCS development competition.

However, at this stage the technology is not being made a pre-requisite for planning permission as is the case with coal-fired facilities. On the same day, Dong Energy announced commercial operations at its Severn gas-fired plant in Wales. When fully on-line, the plant will generate 842MW.

Commenting on the plant clearance, Charles Hendry, Minister for Energy, stated, "About a quarter of the UK's generating capacity is due to close by 2018 and we need to ensure that we secure the investment to replace that. In securing this investment, energy security will be at the forefront of our minds, and a diverse supply is crucial to that. Today's announcement is a double boost for our energy security".