Another step towards a supply crunch?

Confidence in the UK’s energy supply was questioned again this week following SSE’s decision to close three of four units at their 2GW Fiddler’s Ferry coal fired power station, in Cheshire.

The decision was a significant move for the industry because SSE will now be liable to pay £33 million for breaking their contract early. With a volatile energy market and challenging economic and environmental conditions, if one company can break its contract and accept a large penalty, so can others.

Amber Rudd, Secretary of State for Energy and Climate Change suggested this week that DECC was looking to enforce a phase-out plan for unabated coal-fired energy generation in the UK and that a consultation would be launched soon.

SSE’s decision has only fuelled more speculation over the UK’s tightened market capacity and surely brings the adoption of clean, reliable renewable energy back up the agenda. If the government continues to issue the wrong messages about fossil fuels and does not support the renewables sector, how will the UK fill the looming supply gap that will undoubtedly occur if coal fired power stations close with a gathered pace.

Fittingly, Amber Rudd also gave a keynote speech at the Cleantech Innovate conference this week in London, declaring, “By the end of this Parliamentary term, my department, a member of the group, will have contributed around £200m in low carbon innovation funding”. You can read her full speech here.

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