OREANDA-NEWS. The UK's 1GW Rugeley coal-fired power station will cease operations over the coming months, plant owner French energy firm Engie said.

Rugeley will shut down early this summer because of the "deterioration in market conditions for UK coal-fired power generation", Engie said today.

"Market conditions for UK coal-fired plants have deteriorated rapidly in recent years, as a result of a continued fall in power prices, on the back of commodity market declines, and increases in carbon costs," it said. "Under such conditions, there is no prospect of the power station recovering its future operating losses."

Engie will keep "all options for the power station under review", indicating the possible consideration of the capacity being contracted under transmission system operator National Grid's supplemental balancing reserve scheme for winter 2016-17. The programme keeps capacity that would otherwise be mothballed or closed outside of the wholesale market in reserve, to be brought on line if supply margins significantly narrow.

Rugeley competed in December's capacity market auction but was unsuccessful, meaning that Engie would not receive capacity payments for the plant's availability in 2019-20.

The news of Rugeley's planned closure comes after UK utility SSE said last week that it would close three of the four units at its Fiddlers Ferry coal plant by the end of next month. The scheduled closures add to planned shut downs at the Longannet, Eggborough and Ferrybridge coal plants over the coming months.

Rugeley was commissioned in 1970. Engie remains a long-term committed partner for the UK energy sector, it said, despite the planned closure.

The plant's two units have operated at an average of 225MW over the past 12 months. Unit six has generated every month and averaged 321MW, while unit seven did not generate in the summer months or so far this year.

The four UK coal plants that are scheduled to close this year have operated at a combined average of 2.76GW over the past 12 months — with peak output of 3.59GW in November and a low of 1.19GW in July.