Cash-strapped RWE halts Tilbury biomass project

RWE Npower has shelved its biomass project at Tilbury Power Station, citing difficult market conditions.

The decision takes a further 750MW of generation offline, potentially exacerbating a predicted capacity squeeze mid-decade.

The plant is opted out of the Large Combustion Plant Directive (LCPD) and is expected to run out of allowed operating hours later this month. It officially closes on 31 October.

RWE converted the plant to run on biomass instead of coal in 2011 as a trial. The company was awarded planning permission for a wholesale refurbishment that would allow Tilbury to re-open as a dedicated biomass plant after the LCPD hours elapsed.

However, the cash-strapped German-owned company decided it was not worth pursuing the project in the current climate.

Roger Miesen, chief technical officer at RWE Generation, said: “It is with regret that we are announcing the decision to halt the Tilbury Biomass project.

“This decision has not been taken lightly. Tilbury remains a good site for future power generation. RWE still believes that biomass has a role to play in future power generation and will continue to progress options at strategic sites.”

A spokeswoman said the company was keeping its options open but did not see the situation changing in the short term.

Some of the plant’s 220 workers may be offered jobs elsewhere but others will be made redundant.

In a statement, the firm said the biomass trial had been a commercial and technical success. This was despite a fire in 2012 shutting some units down for more than six months.

Ofgem last week published a capacity assessment report saying that power margins could fall as low as 2 per cent mid-decade.

A spokeswoman for Ofgem said the report had taken into account risks such as earlier than expected closure of plants and did not make plant-specific assumptions.