National Grid’s decision to grant lucrative contracts to two large British coal-fired power plants, helping keep them open, shows it is in a “blind panic” about electricity supplies next winter, according to industry insiders. At the end of last week, National Grid, which runs the UK electricity network, granted two services contracts – one to Fiddlers Ferry in Cheshire the other to Drax in North Yorkshire. The deals will ensure in an emergency the power stations are able to start up again without electricity from the grid, which would be essential in a national power outage. But industry insiders believe that with electricity supplies looking tighter than ever, the contracts are designed to make sure the plants stay open over next winter. National Grid denies this, saying the companies won a competitive bidding process. Sara Bell, chief executive of Tempus Energy, which provides electricity through the wholesale markets, has asked the competition watchdog and Ofgem, the energy regulator, to investigate. “This is a bilateral, behind closed doors transaction, in support of a coal plant that only a few weeks ago stated it could not continue to operate,” she said. “Worse still, the sudden nature of the deal announcement has moved the market, to the detriment of other market participants.” She said Tempus was also considering a legal challenge.
FT 3rd April 2016 read more »