December 6, 2016
On 6th December 2016 Watt Power Limited has sold its interest in the four 299 MW gas-fired projects to Drax Group plc.
December 6, 2016
On 6th December 2016 Watt Power Limited has sold its interest in the four 299 MW gas-fired projects to Drax Group plc.
January 6th, 2016
Watt Power’s two consented 299MW gas-fired generation projects (in Suffolk and in south Wales) did not secure contracts in the Government’s recent Capacity Market Auction for future power generation (held in December 2015). As a result, Watt Power will not be submitting an application for a Development Consent Order to the Planning Inspectorate for its Millbrook and Abergelli projects during the course of 2016.
If contracts are secured for its two consented projects in the Government’s next Capacity Market Auction (to be held in December 2016), Watt Power would look to submit a Development Consent Order application for one or both of its two other 299MW projects in 2017.
Watt Power has been seeking to develop a portfolio of small, flexible power projects to support the security of electricity supply in England and Wales since 2012. The principle focus of these efforts has centred on the development of two 300MW gas-fired generation projects in wholly-owned subsidiary companies Progress Power and Hirwaun Power. These projects participated in the 2015 Capacity Market Auction but were unsuccessful in securing contracts.
Watt Power’s subsidiary company, Prime Energy, has focused on small-scale distributed generation projects. Seven Prime Energy projects were successful in the 2015 Capacity Market Auction, and subject to their raising construction finance, are targeted to be built in time to meet their Capacity Mechanism commitment in 2019, at the latest. Each 20MW project will provide short-run back-up generation to the Grid, at times when electricity demand is at its highest – normally during winter weekday evenings.
Watt Power, the independent power station development company, has secured consent from the Department of Energy & Climate Change for its first gas-fired power projects in the UK: the Hirwaun Power project, near Aberdare in south Wales, and the Progress Power project located near Eye in Suffolk. The two open-cycle gas fired power generation plants are the first of their kind to be permitted in the UK and they will be entered into the Government’s Capacity Market Auction, scheduled for December 2015.
Subject to the outcome of the Capacity Market Auction and the projects’ financing, Watt Power would expect both plants to commence construction within 18 months of the Auction, with commercial operation scheduled for 2019.
After a 2½ year consultation and examination process for each of the two projects, Amber Rudd, the Secretary of State for Energy & Climate Change has granted Development Consent Orders (DCOs) to both. Each open-cycle gas turbine project has a capacity of 299MW and will operate as “peaking plant”, providing back-up to intermittent renewable generation and at times of high system demand.
George Grant, a Director of Watt Power, said: “This is great news for the Watt Power team and the UK Government. Our projects are designed to meet the UK Government’s energy policy objectives of security of supply and affordability and support the country’s transition to a low-carbon economy.”
“However, despite the widespread acceptance that new generation plant is required and the considerable investment we have made to date, we don’t have any guarantees of success in the Capacity Market Auction given the current market arrangements. We recognise that there is still much to do even though we have the DCOs for two projects: it is an important point that Government and market commentators should not overlook.”
Decisions from Secretary of State for Energy Expected Mid-Summer 2015
The DCO Examination Phases for Watt Power’s Hirwaun Power Project, in South Wales and Progress Power near Eye, Suffolk were concluded in January 2015, and are currently under consideration by the Planning Inspectorate.
In accordance with the statutory DCO timetable, decisions as to whether or not to grant Development Consent Orders to these two projects are expected from the Secretary of State for Energy and Climate Change in mid-July 2015.
Assuming DCOs are granted to the projects, it is Watt Power’s intention to enter both in the UK’s Capacity Market Auction. Subject to the outcome of the Auction and the projects’ financing, Watt Power would expect both plants to commence construction within 12 months of the auction, with commercial operation approximately 18 months later.
Watt Power’s second two gas-fired power station projects, Abergelli Power near Swansea and Millbrook Power in Befordshire, have recently completed their respective DCO pre-application consultation phases and continue to progress. It is anticipated that both applications will be submitted to the Planning Inspectorate in the second half of 2015.
Project applications accepted for examination.
Watt Power’s first gas-fired power station projects in the UK have been accepted for examination by the Planning Inspectorate. These projects, one at Hirwaun near Aberdare in South Wales and the other located near Eye in Suffolk (England), will each generate approximately 300MW of electricity, using simple cycle gas turbine technology.
Given their sizes, the stations will require a Development Consent Order (DCO) from the Secretary of State for Energy & Climate Change once their applications have been examined by the Planning Inspectorate. The examination processes for both plants are expected to start this summer and each will take up to 12 months.
The power stations, which were announced in the spring of 2013, have been designed to operate as “peaking” plant so that they can respond quickly and efficiently to short-term variations in demand and intermittent output from onshore and offshore wind power. Subject to the outcome of the DCO process, as well as financing, the £200m projects would target operation in 2018/19. They will each create over 150 construction jobs, as well as a number of permanent skilled jobs at each plant for operation and maintenance.
George Grant, a director of Watt Power Ltd, said: “Securing examination acceptance for Watt Power’s first projects is a significant milestone, and we expect decisions from the Secretary of State on both projects by the middle of 2015. As we work towards a lower carbon environment, low cost peaking plant will become more important in maintaining energy security and providing the necessary system balance as the country increases intermittent wind and solar sources of electricity. These types of plant will support the Government’s objectives in helping achieve Energy Security, Affordability and Low Carbon targets. This a major step forward for Watt Power in our plans to deliver a portfolio of similar plant elsewhere in the UK. ”
About Watt Power (www.wattpowerltd.co.uk)
Watt Power was established in 2011. In January 2014, Noble Group Ltd acquired a majority shareholding in the company. Noble Group is an international infrastructure, logistics and trading company with headquarters in Hong Kong. It manages energy assets in the UK where it employs around 250 staff (www.thisisnoble.com).
Watt Power Ltd operates under a management services agreement with Stag Energy Ltd (www.stagenergy.com). Stag Energy has extensive experience in the development of power stations and related energy infrastructure projects in the UK and overseas.
For further information:
George Grant, Watt Power: firstname.lastname@example.org / +44 (0)131 550 3380
Paul Taylor, Taylor Keogh Communications: email@example.com / +44 (0)20 3170 8465
Gas-fired power generation provided by independents and new market entrants has a vital role to play in attracting new investment capital into the industry, securing electricity supplies and minimizing the overall cost of electricity market reform to industrial and residential customers.
However, independent gas power station developers and operators as well as leading financial institutions are concerned that the Energy Bill makes no reference to competition in the electricity market. The guidelines issued last week by the Government relating to the operation of the proposed capacity market would make it impossible for independents and new entrants to raise finance in order to participate in the capacity auction and compete effectively with the “Big Six” dominant market incumbents.
– In a meeting with DECC’s Michael Fallon on 13 June, independent gas power station developers and operators (Stag Energy, Intergen and Carlton Power), supported by senior representatives from leading financial institutions and investors in the UK energy infrastructure sector, called on the Government to make explicit reference in the Energy Bill to the need to use the capacity mechanism to promote competition. This would be consistent with obligations contained in the Electricity Act 1989 and the EU’s Third Energy Directive.
– The explicit recognition in the Bill of the need to encourage competition will help ensure that the capacity mechanism is designed in such a way that allows independents and new entrants to (a) secure the funding (equity and debt) for new investment, and (b) compete effectively with the “Big Six” in the proposed capacity auction.
– In particular, independents require (a) contract lengths for new build of at least 15 years (10 years is currently proposed by DECC) to allow operators to spread capital repayments over a longer period and thereby reduce the annual capacity payment, and (b) contract terms which increase revenue certainty and reduce financial risk eg specific allowance for planned maintenance, a broad definition of force majeure and most important of all, a substantial reduction in the rate at which penalties are incurred and in the level of the proposed penalty cap.
– Penalties are to be imposed for non-delivery of energy at times of stress to ensure generators have an incentive to be available when needed. However, under current proposals generators could lose twice the value of the capacity payment each and every year which places an unknown and uncontrollable risk on generators and their financiers. Independents support the principle of penalties such as those that apply to offshore-wind and transmission developers but a penalty cap for non-delivery of energy of no more than 25% of annual revenues would be both more equitable and “fundable”.
– These changes in the design of the capacity mechanism would mean that independents can finance projects at a lower cost and require less support from the capacity auctions. This in turn would (a) lower the cost of delivering new capacity and reduce the windfall gain to existing plant bidding into the auction, and (b) reduce the overall cost of the capacity mechanism to all consumers.
– The “Big Six” dominate the market in both electricity production and supply. This vertical integration means that the incumbents have a captive market for their output while independents find it extremely difficult to secure long-term sales contracts to underpin the financing of new generation. Furthermore, the “Big Six” are less dependent on external project finance because they can finance on balance sheet and spread investments over a portfolio of assets.
– The Government has charged OFGEM with the task of increasing market competition. But short of formally unbundling generation and supply, which would be a costly and time consuming process, there is very little OFGEM can do. Proposals to force the “Big Six” to trade more of their power in the market may increase short term liquidity but will not lead to more competition in electricity generation and supply.
– Last week (27 June) OFGEM highlighted the increasing risks to security of electricity supply and the Government itself has accepted that as much as 41GW of new gas plant will be needed by 2030 to compensate for the withdrawal of coal-fired generation, the delays in new nuclear construction and the intermittency of wind power. With competing demands worldwide on their limited resources, the Government cannot rely on the “Big Six” to fund all the new investment required. Therefore independents and new entrants have a vital role to play in both keeping the lights on and increasing competition.
– The Government has now confirmed that the first capacity auction will take place at the end of 2014. However, if independents are to be able to participate in this and subsequent auctions, the Government needs to use the Energy Bill to introduce a robust capacity framework that enables independents and new entrants to finance the essential new generation of gas projects.
FOR FURTHER INFORMATION
Stag Energy’s George Grant – 0131 550 3380
Clive Moffatt – 07831 571776
Notes to Editors
Stag Energy (www.stagenergy.com) has a long history of power station and related energy infrastructure project developments in the UK and overseas. The team has been involved in the creation and delivery of more than 10,000MW of power generation projects, including the Rocksavage gas-fired power station in Cheshire, the Coryton gas-fired power station in Essex and the Spalding gas-fired power station in Lincolnshire. Stag Energy has also led the Gateway Gas Storage project which was consented by the UK Government and the local authority (Barrow-in-Furness, Cumbria) in 2008.
Stag has established Watt Power to develop small-scale flexible gas-fired plant (up to 299MW capacity) in the UK. Two projects, Eye Airfield in Suffolk and Hirwaun in South Wales, are at the first stage of the planning and consenting process. Subject to the outcome of the Energy Bill and the proposed capacity mechanism process (as well as planning), both projects could enter operation in late-2018.
A proposal to build a new gas-fired power station on the Hirwaun Industrial Estate in Rhondda Cynon Taf is announced today (12 June 2013).
Hirwaun Power Ltd, a UK energy developer, says that its proposed scheme will inject tens of millions of pounds into the local economy.
The company will consult with local people and organisations before applying for permission to build the £200m power station. The project will support hundreds of jobs during the construction and commissioning period, and up to 30 full-time jobs when operational.
Hirwaun Power station will produce up to 299 megawatts (MW) of electricity – the equivalent of supplying 400,000 homes.
Consultation is a very important part of the planning process and Hirwaun Power will engage with local communities before applying for development consent to build the power station. An initial phase of public information events to introduce the project will be held at venues in Rhigos and Hirwaun on:
Rhigos Community Centre (Heol Esgyn, Rhigos, CF44 9BX)
Thursday, June 20th – 5.00pm till 8.00pm.
YMCA Hirwaun (Manchester Place, Hirwaun, CF44 9RB)
Friday, June 21st – 12 noon till 7.00pm.
Saturday, June 22nd – 09:00am till 1.00pm.
Members of the Hirwaun Power project team will be on hand at the exhibitions to explain the development procedure and how the consultation process is expected to evolve. As the project is at an early stage, there will be no drawings, artists’ impressions or models on display.
Hirwaun Power proposes to take gas from the nearby National Gas Transmission System and use it to generate electricity. This energy will feed into the National Grid, which also runs very close to the site.
Norman Campbell is the managing director of Watt Power, the parent company of Hirwaun Power and has principal responsibility for the project. He said “This power station will be an ultra modern and clean facility and a very significant investment in the local economy. We will seek to maximise local economic benefit, both during construction and operations. This will be achieved through direct job opportunities, and also indirectly through the various companies that will supply and support the power station in the future.
“This power station will cost approximately £200 million, and tens of millions of that investment would be spent with local companies. We are strongly committed to benefiting the local area and engaging companies and job seekers.”
He continued, “Before seeking permission to build the plant, there will be an extensive consultation process with Rhondda Cynon Taf County Borough Council and with local people and interest groups. This is extremely important to us, as we want to explain our plan in detail and listen to what people have to say.
Information material will be distributed to households, businesses and other organisations. There will also be a series of information days where people can meet the project team, ask questions and voice their opinion. We will advertise public consultations in local media and on the project website, www.hirwaunpower.co.uk.
Mr Campbell added that the proposed Hirwaun Power Plant would help to meet electricity demand for homes and workplaces.
“There is a need to replace a significant number of coal and oil-fired power stations in the UK that will close in the near future,” he said. “It is accepted that without new electricity generating capacity, there could be difficulty meeting energy demand in the UK within several years. In addition, gas fired power stations will provide back-up to the intermittency of onshore and offshore wind power and support Wales’ move towards a low carbon economy.
“The proposed Hirwaun Power Plant would be efficient and produce energy much more cleanly than the coal and oil-fired power stations it would replace. We will do our utmost to ensure that the power plant will cause the minimum disturbance locally, during construction and subsequent operation.
Mr Campbell said that Rhondda Cynon Taf County Borough Council and the Welsh Government had been briefed on the proposal. Following consultation and feedback from communities and interest groups, Hirwaun Power intends to submit an application for a Development Consent Order to the UK’s Planning Inspectorate later this year, with a final decision taken by the Secretary of State for Energy and Climate Change. Additional consents, including planning permissions, may also be required for elements of the project.
Subject to the consultation and planning process and financing, the power station could enter commercial operation in 2018.
For further information contact the Hirwaun Power press office on 02920 814843 or alternatively email firstname.lastname@example.org
Notes to editors:
Click here to download Progress Power Scoping Report
Progress Power Ltd, a UK energy developer, today announces proposals to build a gasfired
power station at Eye Airfield in Suffolk.
The proposed scheme will plough tens of millions of pounds into the local economy,
support hundreds of jobs during construction and create up to 30 new full time jobs when
operational. It will also underpin Mid Suffolk District Council’s development ambitions at
the Airfield. Mid Suffolk District Council has zoned the Airfield for industrial development
focusing on the food, logistics and energy sectors. Eye Airfield already hosts two wind
turbines and the Eye chicken litter power plant, and has an area identified for development as an Energy Park.
Progress Power will engage with local communities before applying for consent to build
the £200m power station. The first phase of public exhibitions will be held at Eye
Community Centre (Magdalen Street, Eye IP23 7AJ) on:
Friday, May 17th – 12.00 noon till 5.30pm.
Saturday, May 18th – 9.00am till 1.00pm.
At this initial exhibition, members of the Progress Power project team will explain how the
proposals will be developed and how the consultation process is expected to evolve. As
the project is at an early stage, there will be no drawings, artists’ impressions or models on
The proposed Progress Power plant will take gas from the nearby National Gas
Transmission System and use it to produce electricity. This electricity will feed into the
National Grid, which also runs very close to the site. The power station will produce up to
299 megawatts (MW) of electricity, enough to supply around 400,000 homes.
Progress Power’s Project Manager Chris McKerrow said: “This will be an ultra-modern and
clean facility and a very significant investment in the local economy. We are determined
that there should be as much local economic benefit as possible, not only during
construction and commissioning which could take up to three years, but for many years thereafter. This will be achieved through jobs created directly as well as indirectly in the
various companies that will supply and support the power station in the future.
“The cost of the power station is in the region of £200m, and we anticipate that local
companies and suppliers will benefit from the business opportunities that will arise. We are strongly committed to boosting the local economy and local employment where possible.”
Chris McKerrow added: “Before applying for permission to build the plant we will hold an
extensive informal and formal consultation process with Mid Suffolk District Council,
Suffolk County Council and with people in local communities, as well as many
organisations and other authorities that may have an interest. This is crucially important to us. We want to explain our plan in detail and take account of what people have to say.
“Information material will be distributed to households, businesses and other organisations within the local vicinity. The exhibition at Eye Community Centre is the first of several which will allow people the opportunity to see our plans, talk to the project team and give us feedback. All activity will be advertised in local media and on the project website.”
Mr McKerrow added that the proposed power plant would become operational at a time
when there will be a need for new power stations to produce the electricity needed for
homes and workplaces.
“A significant number of coal and oil-fired power stations in the UK are set to close in the
near future and will need to be replaced,” he said. “It is accepted that new electricity
generating capacity is needed to meet energy demand in the UK in the near future. In
addition, gas fired power stations will provide back-up to the intermittency of renewable
power and support the country’s transition to a low carbon economy.
“The proposed scheme would be more efficient and produce energy much more cleanly
than the coal and oil-fired power stations it would replace. We will do our utmost to ensure that the power plant will cause the minimum disturbance locally, both during construction and operation. Plant operation will be subject to stringent emission regulations.”
Mid Suffolk District and Suffolk County Council have been briefed on the proposal.
Following consultation and feedback from communities and interest groups, Progress
Power intends to submit its application for a Development Consent Order to the UK’s
Planning Inspectorate later this year, with a final decision to be taken by the Secretary of
State for Energy and Climate Change.
Subject to successful consultation and planning process and financing, the power station
could enter commercial operation as early as 2018.
For further information:
Progress Power press office
Patrick Peal or Harriet Thorpe
Tel: 01603 417722
Email: email@example.com / firstname.lastname@example.org
or email email@example.com
Notes to editors:
Progress Power Ltd (www.progresspower.co.uk) was established by Watt Power Ltd.
(WPL) to take forward the Eye project. WPL plans to develop a portfolio of flexible gas
fired generation assets throughout the UK to support the UK Government’s drive to a low
carbon economy. Stag Energy provides the resources through a management services
agreement with WPL. Stag Energy was founded in 2002 and the company draws on a
depth of experience with a team that has created and delivered over 10,000 MW of power
generation and related infrastructure projects across the globe, of which 2,500 MW was
delivered in the UK.
Stag Energy and WPL are committed to the development of well sited, sustainable energy
projects that are designed to meet the specific needs of the evolving UK energy market.
They recognise the need to balance commercial issues with the environmental benefits
and concerns of energy projects and believe this can be responsibly delivered at a local
They are also committed to acting in a socially and environmentally responsible manner.
As part of this policy, they will ensure that the views and concerns of the local community
are addressed, and that the Progress Power project and supporting infrastructure is
designed and developed to the highest quality, safety and environmental standards.