Glut of gas-fired power plant feared

ELECTRICITY companies will be forced to sell gas on the open market because of an expected glut of gas-fired electricity generating plant, according to the Association of Independent Electricity Producers, writes Mary Fagan.

Almost all the emerging gas- fired generators, most of which include the regional electricity companies as shareholders, are locked into 15-year contracts to buy gas.

Neil Bryson, the association's chairman, said that not all the gas-fired plant would be able to run all the time, for which they were designed. He added: 'I believe the gas contracted for but not used will come into the industrial market in competition with British Gas, forcing down the price of gas. I would expect to see distress sales.'

The National Grid Company has said that the UK could have more than 50 per cent too much electricity generating capacity within a few years.

Mr Bryson said many combined cycle gas turbine generators would not be economic at current gas prices. A further problem is that they may not all be flexible enough to meet National Grid Company requirements for plants that can be called on at a moment's notice.