Power station closures to be reviewed

The electricity industry regulator yesterday dealt an unexpected blow to National Power and PowerGen when he launched a review of their recent decisions to close part of three coal-fired power stations.

Professor Stephen Littlechild warned that the moves to reduce coal-fired generating capacity, which would take effect from next April, could drive up wholesale power prices. The review, by an independent consultant, would look at whether the two companies should offer generating capacity for sale to outside bidders.

The probe represents a boost for RJB Mining, the UK's leading coal producer, which has highlighted the risk to mining jobs from the reduction in coal- fired generating plants and the rise of gas generation. RJB had urged the privatised generators to offer parts of their power stations to other operators in the hope that it would maintain demand for coal.

The investigation will focus on National Power's closure of a generating unit at Willington power station in Derbyshire and the mothballing of two units at a large station at Tilbury in Essex, which burn imported coal. PowerGen's decision to shut one of four units at the Ferrybridge power station near Doncaster will also be examined.

A spokesman for National Power said the company was "continually approached" about selling generating capacity, but said it would be too difficult to sell or lease parts of existing stations. "We don't believe it's tenable for a competitor to own or lease part of a production unit which is located under the same roof with common services at a plant we continue to operate."

Chris Godsmark